# Bank Cuts Base Interest Rate To Historic Low



## Bristle Hound (May 31, 2009)

The Bank of England has taken radical action to prevent the UK from falling into recession, cutting interest rates to 0.25% - the lowest level in the institution's 322-year history - and pumping billions of pounds of newly created money into the economy.

http://news.sky.com/story/bank-cuts-base-interest-rate-to-historic-low-10522403

Good news for people with a mortgage bad news for people with savings

I remember when we took out our first mortgage, the BOE interest rate was 13.5% :doublesho


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## DrEskimo (Jan 7, 2016)

Sort of good timing for me...about to spend all our savings, as well as borrow more on our mortgage to pay for an extension/renovation on a house we bought back in February!

Taken a while but looks like we are finally going to get planning approval!


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## danwel (Feb 18, 2007)

Good for me as i am currently looking at getting a new mortgage deal to get my ex wife off my current deal.

That said i currently have one mortgage that is base rate plus 2% so looks like i could be making a saving


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## BoroDave74 (May 16, 2009)

Been jealous of my brother-in-law's lifetime tracker base rate -1% for eight long years.
Truth be told its more terrible news for savers.
Lets hope its fully passed on to anyone on an SVR unable to change because of the ludicrous affordability rules.


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## Soul boy 68 (Sep 8, 2013)

Oh well time to stuff what savings I have left under the mattress.


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## justina3 (Jan 11, 2008)

Dont see it as good news for anyone, they only take such action when the economy is doing bad.


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## robertdon777 (Nov 3, 2005)

Awkward one.. people will say always say oh I remember when I started out I paid 14% etc.

But what they don't tell you is they were also getting good pay rises. Its all horses for courses. (Our first house was purchased when they were about 8%)


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## robertdon777 (Nov 3, 2005)

DrEskimo said:


> Sort of good timing for me...about to spend all our savings, as well as borrow more on our mortgage to pay for an extension/renovation on a house we bought back in February!
> 
> Taken a while but looks like we are finally going to get planning approval!


You save to spend... otherwise pointless. Good luck with the extension. We did ours 2 years ago now with our savings. Now I'm Brass Monkey but love what the money purchased.

P.S Add 25% onto whatever you think you have for a budget LOL. A new extension brings many new things onto the wish list...even after 2 years.


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## danwel (Feb 18, 2007)

robertdon777 said:


> Awkward one.. people will say always say oh I remember when I started out I paid 14% etc.
> 
> But what they don't tell you is they were also getting good pay rises. Its all horses for courses. (Our first house was purchased when they were about 8%)


Yeh i think my first house about 6/7 years ago was at a rate of 6.5 %


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## DrEskimo (Jan 7, 2016)

robertdon777 said:


> You save to spend... otherwise pointless. Good luck with the extension. We did ours 2 years ago now with our savings. Now I'm Brass Monkey but love what the money purchased.
> 
> P.S Add 25% onto whatever you think you have for a budget LOL. A new extension brings many new things onto the wish list...even after 2 years.


Cheers! Yea we've been told to allow for additional spending...! And I thought cars were expensive :doublesho


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## Naddy37 (Oct 27, 2005)

All very well dropping it, but, let's see how many struggle when the time comes to raise the rate!


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## robertdon777 (Nov 3, 2005)

neilos said:


> All very well dropping it, but, let's see how many struggle when the time comes to raise the rate!


 I think the rate rises will come over a lengthy period giving everyone (well unless they are stupid) time to either re-arrange their finances or get a half decent fixed rate.

Obviously borrowing to your max when the rates are this low could be problematic in the future. But usually with rate rises comes increased house prices too giving the people that have stretched a little more equity to negotiate a better mortgage again.

The last thing banks want is to be repossessing loads of houses, they make more money keeping people in the houses and financing them again over longer periods.


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