Mortgage Repayments Increase – Rainy Day sees the savings Come Out!
Mortgage Repayments Increase – Rainy Day sees the savings Come Out!
I have just been reading an article on the BBC to do with there being an increase in the amount of money homeowners are repaying to the bank.
http://news.bbc.co.uk/1/hi/business/8132081.stm
For the first 3 months of 2009 it’s estimated that over £8 Billion was repaid.
Why do you think this?
I am no business expert but this may be because of low interest rates, homeowners with a variable rate mortgage means that the interest they pay back on their loan can vary when the Bank of England puts up or down the interest rate, Banks then follow suit doing relatively the same sort of thing.
Interest rates have been lowered in the UK dramatically over the last 10 months to encourage lending of money between banks and consumers. People may find that it’s worth whilst paying back as much as they can now (perhaps using savings) instead of saving because with low interest rates they are not seeing as much return on savings.
I think a rainy day in Britain has been spotted and people are the savings are coming out.
I know I said because about low interest rates put people off saving and that there should be some sort of incentive for people to save in a recession because of uncertainty over their job but also as a well of injecting money into banks so that they can lend it out again, but perhaps there’s another way, let’s get homeowners to not save but to give it back to the bank in another form, mortgage repayments!
