05-06-2003 16:40									#1
	Interest Rates in Europe Enter the AD-FREE zone

Bank of England's on hold. No surprise there...

Now 0.25% or 0.5% cut in Eurozone?

	05-06-2003 16:50									#2
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They should do it the Japanese way and just put them on -0.something

	05-06-2003 16:51									#3
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0.001 I think.. Negative wouldn't work Eccy, people would withdraw.

	05-06-2003 16:53									#4
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negative does work, it actually encourages people to take loans, don't you think?

	05-06-2003 16:57									#5
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The debt will appreciate; no point.

Come on ECB, 10 minutes late!

	05-06-2003 16:59									#6
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they've done it in japan before.... the reason it didn't work is because they're just themselves, no else.

	05-06-2003 17:02									#7
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Interesting anecdote I heard about Japs is that when interest rates half, they save twice as much since they want the return from their savings to be constant.

	05-06-2003 17:03									#8
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Down 0.5% to 2%. Too much German influence.

If we were in single currency now, we'd spiral into a boom...

	05-06-2003 17:17									#9
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Get a grip on your housing bubbles, and it's no problem.

	05-06-2003 17:34									#10
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That would mean altering planning regulations; wouldn't make the greens and environmentalists happy would it.

Let's do it.

	05-06-2003 17:36									#11
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That's one part of the problem. The other is the extreme interest rate sensitivity of your housing market. I never really understood this.

	05-06-2003 17:41									#12
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quote: Originally posted by HershOstropoler That's one part of the problem. The other is the extreme interest rate sensitivity of your housing market. I never really understood this.

Your mortgage is your major outlay every month, I'm certainly very 'sensitive' to it altering!

	05-06-2003 17:42									#13
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Variable rate mortgages are common in UK. Explains part of it. High home ownership - 65%ish in UK, 40% in Germany.

Very restrictive planning regulations, in addition to us being a small country, means a small increase in demand can increase prices wildly.

Good article in this week's Economist actually. Don't agree with all what they say, but they explain Britain's housing bubbles quite well.

	05-06-2003 17:46									#14
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@ Japanese reaction to interest changes

	05-06-2003 17:49									#15
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quote: Originally posted by Ecthelion @ Japanese reaction to interest changes

Well otherwise they'd be squinting twice as bad at their lower savings balances.

	05-06-2003 17:52									#16
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quote: Originally posted by reds4ever Your mortgage is your major outlay every month, I'm certainly very 'sensitive' to it altering!

Same for me, but it is fixed for 13 years, and semi-fixed for the next 15 years. Switching to fixed interest rate mortgages is a common theme when it comes to EMU, but why do you (individually) not have a fixed mortgage?

	05-06-2003 17:53									#17
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Because I don't have my own house.

	05-06-2003 18:37									#18
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"...but why do you (individually) not have a fixed mortgage?"

I'm not sure anyone does fixed rate for the life of the mortgage around here.

	05-06-2003 18:43									#19
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Yeah, but why?

There are both kinds on offer here, but I clearly prefer a fixed rate.

	05-06-2003 18:46									#20
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I have a variable, it allows me to remortgae to a short term fixed rate if I wish. I thought on a long term fixed rate it was difficult to change

	05-06-2003 18:48									#21
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quote: Originally posted by HershOstropoler Same for me, but it is fixed for 13 years, and semi-fixed for the next 15 years. Switching to fixed interest rate mortgages is a common theme when it comes to EMU, but why do you (individually) not have a fixed mortgage?

I'm 3 years into a 5 year mortgage, many (most?) of the lenders offer reduced rates for (say) the first 2 years if you sign for for 4 or 5 years, so it pays, at the moment, to sign short term deals so you can get the most 'introductory offers'.

I have to admit thou if the interest rates are this low when I come out of my current deal I'll be looking at a 15 year fixed rate mortgage for peace of mind.

	05-06-2003 18:49									#22
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I'd change to fixed now. But I don't really know how mortgages work...

	05-06-2003 18:53									#23
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I thought on a long term fixed rate it was difficult to change

You would have to refinance.

	05-06-2003 18:54									#24
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quote: Originally posted by Boddington's I'd change to fixed now. But I don't really know how mortgages work...

So would I but the 'introductory offers' invariably have penalty clauses if you opt out early. ie. they get their pound of flesh one way or the other.

	05-06-2003 18:57									#25
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quote: Originally posted by DanS I thought on a long term fixed rate it was difficult to change You would have to refinance.

Yes, I meant without paying a penalty

	05-06-2003 18:59									#26
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A penalty? The mortgage business is in business to write mortgages. Don't know why they would cut off their ears to spite their faces.

	05-06-2003 19:01									#27
	Help yourself to an AD-FREE life

There are mortgages in the UK that impose a penalty payment if you redeem early. Theese tend to be fixed rate ones.

	05-06-2003 19:04									#28
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Ah, I see. That's pretty silly, if you ask me. They are giving up huge refinance fees.

	05-06-2003 19:06									#29
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The mortgae business in the UK is hugely competitive and you can get good deals if you look around

	05-06-2003 19:18									#30
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"Yeah, but why?"

I have no idea why...do interest rates vary more in the UK compared to the mainland?