UK Landlord Forum / Life

The Bank of England has cut interest rates to 1.5%, the lowest level in its 315-year history, as it continues efforts to aid an economic recovery.

The half percentage point reduction brings interest rates below 2% for the first time since the Bank of England was founded in 1694.



Full story from the bbc here

Bliss.

I think i will go on a far away holiday this year on what i am saving

Woolwich
Just gone down to 1.99.  In all honesty, they will be paying me soon to have a mortgage with them its gone that low,

You lucky son of a gun!

This fall in the interest rate is a boon for a borrower. However, it is still wise not to take any decision in haste just to avail the low interest rate by the Bank of England. This is great move towards economic recovery and is likely to increase the flow of money in the market.

"Previously a big chunk of mortgage lending activity was spoken for by people switching, moving or extending their mortgages. This accounted for as much as 40 per cent of mortgage enquiries, although not 40% of actual borrowing when you factor in repayment of existing loans. Nevertheless, with people drawing on increases in equity to repay their consumer loans, remortgaging has been big business during the mortgage boom.
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Gross mortgage lending totalled an estimated £12.6 billion in August, according to the Council of Mortgage Lenders. This is 13 per cent lower than July's revised total of £14.5 billion, but that's probably seasonal: lending usually dips in August, even in boom years. The ongoing lull in remortgage activity has taken most of the fizz out of gross lending figures, since it used to account for around a third of mortgages issued. Last August, a flurry of remortgaging contributed to gross lending figures of £19.9 billion, as householders worried about the prospect of steeply increasing rates.
The new Woolwich mortgage deal is called the Step Tracker. Its headline starting rate of 1.98% is available to borrowers with 40% deposit or current equity in their property. But with a rate this low you'd expect a catch, and yes, there's a substantial one. The discounted tracker rate – 1.48% on top of Barclays Bank Base Rate (BBBR) – only applies for the first year.  After 12 months, it reverts to a lifetime rate of BBBR plus 2.49%. There's also an Early Repayment Charge (ERC) for the first three years, requiring you to pay two per cent of the sum outstanding if you re-mortgage during that period.
Also, Paragon Mortgages has just released figures showing that nearly 7 in 10 mortgages submitted through mortgage advisers in April, May and June this year were for fixed-rate deals. This is the biggest proportion of fixed rate mortgages since Paragon started surveying the market in 1996. The most popular fixed-rate mortgage term was 2 years. Meanwhile, tracker mortgages fell to only 26% of applications.
Aldermore Bank has started offering saving accounts in summer 2009, making a name for itself with several best-buy table appearances on fixed term savings bonds. On the other hand, the Yorkshire Building Society are looking to welcome in thousands of new borrowers with a radically discounted mortgage line-up. Also, RBS Group claimed that it had stepped into the breach of UK mortgage lending since many other lenders had disappeared from the market.

HSBC has responded to growing demand from first-time buyers, announcing an increase in the amount of money it is earmarking for purchase loans at the 90% loan to value limit.The bank's £500 million increase in allocated lending should enable around 3,650 additional house purchases between now and the New Year (based on an average first-time purchase price of £150,289).
This has come as a good news for buyers. Interest rates are incredibly low and if you are  considering buying, now is the time. This could save you a lot of money each month. When rates go back up, that will accelerate your monthly payments up again. There are now 147 fixed-rate mortgage available if you have less than 10 per cent deposit — an 88% increase on the 78 products available in February 2009.
Leeds Building Society is launching a cheap tracker mortgage at 3.2% or you can pay 3.7% on a similar deal with no lock-in. There are two new tracker mortgages on offer and one fixed-rate deal. The lowest initial interest rate is available on the two-year mortgage tracking at 2.7% over Base Rate. It's limited at 75% loan to value, with total fees of £599.  This mortgage allows you to repay up to 10% of the capital each year without penalty.
Also, for those mortgage-holders—and gladly for the now state-owned (via Lloyds Banking Group) Halifax—the deal has now just about timed out. November will mark the two-year anniversary since the last -0.51% tracker was withdrawn.Technically, borrowers should have been owed 0.01% interest, but in practice the calculation was just ignored and borrowers repaid only the capital.  These borrowers now face a sudden jump in repayments as they revert to Halifax's SVR of 3.5 per cent.  However, Halifax is believed to be offering the a 0.51% discount on this rate if they sign up to a discounted deal for two years