Interest rates cut to 3%

[Rosendula]

OK, before we all get too depressed about this, let's remember Thomzo's thread, 101 Good Things to Come Out of the Recession.

My family suffered badly in the last recession and we never quite managed to get back 'on our feet'. We almost did - then we had Katie and decided that rather than handing her over to someone else to bring up while we worked all hours to pay a mortgage on a new house, we would stay in our tiny council house and paying rent, and raise her properly (with no money ).

Having lived through the last one, I do pity anyone that is not prepared for it, especially those who don't know what to expect. The media is full of it (even I've noticed, and I avoid media as much as possible). It must be really scary for some people.

That said, I think Ishers and other communities like us will survive the best. During the last recession I had no garden, not even a concrete yard, no allotment and no money. A friend who was also going through hard times said they were living off whatever they could find in the garden. I was soooo jealous. Now, with garden and a little allotment, more cooking know-how, and good friends here on Ish to give advice about how to do things for myself, I'm not worried about how my family will cope in the recession at all. We'll be fine.

So perhaps the Ish community has a duty to spread the word and encourage more people to do things for themselves, to help people to help themselves. Any suggestions how to do this would be welcome .

[Odsox]

To the best of my knowledge there were no such thing as fixed rate mortgages from banks/building socs back in the 60/70's. Only local councils offered fixed rate to their resident rate payers.
Also bear in mind mortgages were very difficult to get before the Maggie Thatcher housing boom. Building Societies would only lend if you had been saving with them for umpteen years and personally knew your lineage back to William the conqueror and Banks would only give you a mortgage if you spoke with an upper class accent and didn't really need it anyway.

[Annpan]

If it stayed that way maybe we wouldn't have got into the whole 'sub-prime' nonscense that started all this But the most of us would have never had the chance to buy. A few years ago mortgages were certainly too easy to obtain.

We'll all be fine.... in fact I have received a few emails from old friends who think that this is what I was trying to avoid by leaving the city to become more self-sufficient..... it isn't, but there we go.

[Odsox]

Well perhaps that is something to be said for house prices... we now pay 5% interest on a mortgage but more for the house, you used to pay 17% on the mortgage but less for the house - it still does't balance out obviously but it beats giving so much money to the banks....maybe .... or have I had too much caffeine this morning?

Yeah, you're right.
The house I bought in 1972 was a detatched 3 bedroom cottage on 3/4 acre in rural Kent and it cost me £6,750
Even so, the 17% really hurt.

[Helsbells]

My fiance and I are in the position of having just finished of a very low interest fixed rate mortgage. It came to an end and we had to renew about a month ago when interest rates were much higher. Now everyone is saying the are dropping, and it fills me with dread that we are paying about £300 a month more on the new mortgage than on the previous one, when we could be having one for about the same rates if the rates are passed on to customers. Ours is fixed rate for two years so we either keep it and pay more, or pay a penalty of who-knows-how -much and change to a lower rate.
Its all very confusing and upsetting to me.

[Annpan]

Helsbels, check out Martin Lewis website for advice on that... sounds to me you would be better off getting a new deal but as we have said, I am not sure how many banks are passing it on to the customer.... AND you have the problem of applying for a mortgage in the current climate

We bought our first house (1 bed, ground floor, victorian tenement in need of extensive renovation) for the same as my mum had paid for a 3 bed nearly new house with small front and back garden 15 years previous...

But what can you do about it? that's life...

[missie moo]

then we had Katie and decided that rather than handing her over to someone else to bring up while we worked all hours to pay a mortgage on a new house, we would stay in our tiny council house and paying rent, and raise her properly (with no money ).

luckily, no-one told us that you couldn't go to work AND raise children properly. so we worked, earned money, paid taxes, kept someone else in work (who also paid taxes), paid into pension funds, etc.... and now we have a mortgage-free house and a stack of cash in the bank (well, a few of banks...can't be too careful these days!) as well. oh yes, and two fantastic, intelligent and gifted young adult ('properly raised') offspring....RESULT!

jane

[baldowrie]

Actually that is not entirely true there are some 10-15 year fixed rate one around, not many but they are there.

[Silver Ether]

Glad we paid ours of ages ago ... I am confused by this cut ... It was said that its to get the economy moving again ... getting folks to buy stuff .. isnt this the sort of behaviour that started this mess in the first place. Many folks borrow money tobuy what they want without thinkng about paying it back.

[Odsox]

Glad we paid ours of ages ago ... I am confused by this cut ...

Yeah, me too. I know I'm not the sharpest tool in the box when it comes to the financial sector, but I thought that banks and building societies got their money from investors and lent it back out again to borrowers, getting their cut from the difference in the 2 interest rates.
But who's going to invest money at an almost zero rate of interest in a banking system that maybe you don't trust a whole lot ?

isnt this the sort of behaviour that started this mess in the first place.

If that's substantially correct then the banks must invest money in dodgy high interest foreign (Icelandic) banks to raise the capital to lend to the likes of you and me ... well you really as I doubt if they would lend me any.

[Percy]

I have to admit i'm also not very financially astute. I do understand that there are going to be hard times ahead. Whether i have the right attitude or not i don't know but my philosophy is, as long as there is food on the table and a roof over the OH and kids head everything else can wait. The important bills will get paid as and when i have the ability to pay them. I dare say i may get slated for having this selfish view but all these problems i believe have come from people being selfish in one way or another. I firmly believe that because i was like that myself only about a couple of years ago and now paying for it. There are a lot of people who could benefit from this site and yourselves. I personally thank each and everyone of you that have helped me see the light.

Sorry about the preaching.

[invisiblepiper]

I was 'early retired' (aka made redundant with a small pension) last Friday
it's a bit scary

Very scary - since my last contribution to this thread - a week ago - my OH has been put on half time - and half pay.

[Rosendula]

I was 'early retired' (aka made redundant with a small pension) last Friday
it's a bit scary

Very scary - since my last contribution to this thread - a week ago - my OH has been put on half time - and half pay.

I know it's scary. Good luck and best wishes to you both. My partner went from 40 to 22.5 hours per week at the beginning of this year (for health reasons, nothing to do with the economy). We considered the possibility of me going back into paid work, but decided against it, opting instead to reduce our outgoings - or to put it another way, become more self-sufficient. Yes, we still have bills to pay, but it's amazing what you can cut out or cut down on when you put your mind to it. And I work harder now than I ever did when I was getting paid (yet I'm happier and much less stressed). I've been keeping a list of things we have been doing to cut our costs. If you think it will help you in anyway, let me know and I'll send you it. It's nothing too special - we're just ordinary people living in an ordinary house. Not like some Ishers who have land, and generate their own power and keep animals. If you're one of that group, my small attempts will look feeble to you, but if you're more like me my list might help. I'll shut up now because even I know I'm waffling

[JulieSherris]

..........................I'll shut up now because even I know I'm waffling

You're not - I think we all know what you mean!!

I think it's very scary, although I understand that being here in ireland probably won't be as tight as the UK - at least it doesn't look like it at the moment.

Our mortgage has just gone down by 124 euros a month, which is good news - the irish banks have passed on the interest cuts, which is fantastic.

When I think that this time last year, we had around 50 thousand euros in the bank - MIL is lamenting the fact that we are now 'broke'.... because we 'only' have 3 thou left.... and then I got upset because I started thinking where the money had gone... I feel loads better now though - hubby pointed out that we'd bought a brand new eco-car, which was a good investment.... we paid private for an operation for me... meaning that I am now 7 stone lighter, fitter & have a longer life expectancy as a result... we paid a years rent on a fab house... and then paid out 20 thou on buying this house - all in all, I think we did pretty good! And if nothing else, we had a year off from worrying how our money was going to stretch to pay the bills.
He has a job which is secure for the foreseeable (thank goodness!) we have a wreck of a house which will be lovely in the long run, it's warm, we have food & we can afford to pay our bills - we are extremely lucky because apart from the mortgage, we do not have any other credit or loans - life is good.

I am still hoping that life will be good to you all as well - I think 2009 will be hard - but won't we all be better when we come out of it on the other side?

[Rosendula]

... apart from the mortgage, we do not have any other credit or loans ...

That reminds me of our messages on another thread here. Both Julie and I use spread sheets to keep track of our money and we both feel we live well and without credit, loans or overdafts. On the other thread we both offered to send a spreadsheet with formulas in place to anyone who feels they could use it. Just PM one (or both of us) your email address and we'll send it to you. Even if you're paying off some form of debt, having it all organized and planned out like this is a really easy way to keep on top of it all.