I earlier reported about rates dropping to an unbelievable 2.5% but its ALL CHANGE.

They are now talking about rates being the lowest ever in the history of banking from the year 1694.  I am not making this up!

Rates are set to drop to:

not 2%

not 1.5%

not 1.25%

but to 1%.  Yes 1%.

I was already fantasising about my mortgage payments being reduced by around 50% but now I can start thinking about a 75% reduction in my monthly mortgage payments.

This means a property costing £50,000 will cost:

1%+1.5% bank margin = 2.5% x (£50,000 x 75% LTV) = £78 per month.

Rent will be £500+ because the government have grossly mucked up the housing benefit system in the favour of the landlord so you can start buying properties now (because prices are dead cheap) and which you can remortgage 6 months later at SILLY rates.

So you can buy a property now, remortgage in 6 months, bank £400 per month profit which is recession proof as the government will be paying you the rent.

Forget stock market pension funds.  Welcome to the era of self managed property pensions as being the norm. 

If the government really step in and drop rates to this level I will forgive them for everything in the past (well almost anyway)!

Ajay

PS As I have just written this I have just come across an article where the LibDems have requested a 1.5% cut in interest rates immediately.   

Posted on: 20th Oct 2008