- Jul 16, 2011
It's a bit of a two edge sword here... there is a middle ground somewhere in there.Don't let them fool you, this is short term.
Don't buy car or big items this will be short term. By next year it will go up again.
Lowering interest rates helps businesses that have debt (which is most), to save on debt repayments during a crisis like this ...
It also helps over burdened consumers (yes may be their own fault) from going into default on their loans - this would have a shocking knock on effect and we need to prevent as many defaults as possible.
The flip side of the sword is that lower interest rates encourages people to take money out of purely cash savings and invest them, this helps re-invigorate the economy by helping to "make the cash go around"
But you're spot on - if you couldn't afford the big house before the lockdown, don't go an over extend yourself now thinking you now can because of the low interest rates - we are probably near the bottom of our interest rates and they will start to go up...
Spot on - the break costs are massive and you can't 'park' cash into a fixed rate loan - I mean you can, but it won't "change" your payment plan in anyway, unless you want to pay breakcosts, which on a home loan would be massive!!Generally fixed rates on home loans also apply for much less time, 5 years or less, from what I have seen.