Negative interest rates

dejongj

dejongj

Suspended / Banned
Messages
12,856
Name
Sir will do
Edit My Images
No
Whilst on my way to get a takeaway I was listening to this debate on the radio regarding negative interest rates and how the banks are preparing to charge us to keep our money.

Personally I grew up having to pay for a bank account, as such I don't quite get the issue. But I was wondering how this would work for like a mortgage bank of england tracking rate. I guess I need to reed my terms and conditions as I doubt they'll pay me to keep my secured loan. :)
 
crofter said:
Does this mean my overdraft will go down all on it's own ?:confused:
Click to expand...
Exactly that :) well in theory, I bet in practise its covered in the terms and conditions.
 
dejongj said:
I bet in practise its covered in the terms and conditions.
Click to expand...


Maybe not in the original T&C's when you agreed your overdraft, but I'd sure bet it will be covered in subsequent `updated` info. ;)
 
Looks like I might have a lumpy mattress if this ever actually happens.
 
dejongj said:
But I was wondering how this would work for like a mortgage bank of england tracking rate. I guess I need to reed my terms and conditions as I doubt they'll pay me to keep my secured loan. :)
Click to expand...
It's already happened, I believe it was a base rate -1% or -1.5% tracker that might have gone negative when the base rate hit 0.5% but instead it stopped at 0.1% (allegedly the system couldn't accept 0%). There's plenty of articles discussing this on the BBC/Guardian/etc. websites at the moment if you're genuinely interested.

It's not just the base rate that's the problem, the level of QE being pumped into the system makes it far cheaper for banks to borrow from the Bank of England to cover loans to borrowers than to encourage/reward savers. It's one of the arguments supporting Helicopter Money as better economic stimulus than QE.
 
You must log in or register to reply here.
Back
Top