Comments on: How does Bank of England base rate affect actual lending rates? http://lendingproguide.com/how-does-bank-of-england-base-rate-affect-actual-lending-rates/ Free Consumer Lending Resource Fri, 18 May 2012 11:09:04 +0000 http://wordpress.org/?v=2.7 hourly 1 By: Steve B http://lendingproguide.com/how-does-bank-of-england-base-rate-affect-actual-lending-rates/comment-page-1/#comment-180 Steve B Thu, 25 Sep 2008 10:01:57 +0000 http://lendingproguide.com/how-does-bank-of-england-base-rate-affect-actual-lending-rates/206/#comment-180 BoE does not lend less than a £billion or so at a time .. so, no "you" can't get a 3% loan from BoE ... However it does mean that BoE will pay 3% to other Banks that deposit money with them and will lend them money at 3% ..and all loan notes that are based on BoE rates will now attract lower Interest . IN THEORY this means that money is 'cheaper' .. so it should be possible to get a lower rate Mortgage deal from the (other) Banks ... However (as you may have noticed ?) Banks are VERY worried about falling house prices .. so they are adding a big 'Risk Premium' (look it up) to their lending rates and demanding high deposits .. PS I think you need to read up a bit on the UK Banking / financial system :-) BoE does not lend less than a £billion or so at a time .. so, no “you” can’t get a 3% loan from BoE …

However it does mean that BoE will pay 3% to other Banks that deposit money with them and will lend them money at 3% ..and all loan notes that are based on BoE rates will now attract lower Interest .

IN THEORY this means that money is ‘cheaper’ .. so it should be possible to get a lower rate Mortgage deal from the (other) Banks …
However (as you may have noticed ?) Banks are VERY worried about falling house prices .. so they are adding a big ‘Risk Premium’ (look it up) to their lending rates and demanding high deposits ..

PS I think you need to read up a bit on the UK Banking / financial system :-)

]]> By: Love Canada http://lendingproguide.com/how-does-bank-of-england-base-rate-affect-actual-lending-rates/comment-page-1/#comment-179 Love Canada Thu, 25 Sep 2008 04:28:41 +0000 http://lendingproguide.com/how-does-bank-of-england-base-rate-affect-actual-lending-rates/206/#comment-179 The rate they set is the rate your bank pays to borrow money so if it drops the bank "should" adjust their rate down,(unless they need more profit at the time) The rate they set is the rate your bank pays to borrow money so if it drops the bank “should” adjust their rate down,(unless they need more profit at the time)

]]>