On banks paying interest to people with mortgages or how NOT to run a banking operation: The answer

So it finally happened. This morning I received the letter from Birmingham Midshires answering the million dollar question: What happens when the Bank of England takes the base interest rate down to 0.5% or below and you are paying them 0.5% or higher below BoE base rate?

Well, since the bank’s decision back in March 5, it has taken them over a month to communicate with customers, but if you had hopes of getting paid for having a mortgage (absurd and ridicule thought, but these are absurd and ridicule times), drop it, in an interest only mortgage BM informs me that:

We’re writing to you following the Bank of England’s decision on 5 March 2009 to decrease the Base Rate. We’ll be reducing our interest rates on 1 April 2009, and so you’ll receive the benefit of the reduced rate from this date. We want to keep you informed of how these changes will affect you as outlined below. Continue reading


On a life with no news, day 25

OK, I must confess, I am experiencing withdrawal symptoms and I started peering over shoulders to read some news and staring at covers of magazines and papers at news agents.

A short while ago I started trading on oil CFDs, so it sounds sensible to keep a bit of track on what’s exactly going on in this world of ours.

I think that I have finally cracked it, my problem is that I am not strong enough to build my own opinions, so I borrow from others. The problem being that, if you really read or listen to the news, analysts and pundits go back and forth as they get paid for air time, not common sense or solid rational ideas with a covenant for error.

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On commodities, false tax savings, and raising crime in the British countryside

Friday morning (30Jan09), a PC from the Thames Valley Police station came to take a second statement on the attempted robbery of our humble 15-year-old  Honda. Apparently they caught some Mr Lee and they have a fingerprint match.

Funny enough, the PC didn’t know that the car was stolen again (this time for good) on 31st August. The fact that the car had the same license number and I was informed by the police when they found it 3 days after, beggars believe.

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On banks paying interest to people with mortgages or how NOT to run a banking operation

I was just listening to BBC’s Business Daily podcast and they were interviewing someone in regards to government bonds. The piece finished saying that “in normal circumstances we are all interested in the return ON the investment, but that with falling values along the whole asset spectrum, the interest fell now on the return OF the investment”.

I continued doing the rounds with my financial paperwork and I bumped into a buy-to-let mortgage I’m being charged at:

a variable rate which is 0.56% below the Bank of England base rate, currently 5.75%, for 24 months, to give a current rate payable of 5.19%. When the Bank of England base rate changes, the interest rate on your loan will change on the 1st of the following month.

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On things they make us think that are for everybody but they are not: Home owenership

Hobbes, I believe there is a misconception in Western societies. I guess that is my generation’s (early 30s, and working on a nice curvy stomach) fault.

We grew up on an ever growing GDP world. We grew to believe as rights thinks that older generations couldn’t even think of having one day. Over the years, I have had several discussions with my mother in regards of home ownership. Continue reading

On a trick that potentially can save you money on this month’s mortgage payment

Hobbes, I really have to share it with you. The most strange thing happened today. A one off, or something that will catch me up later on in the year. We’ll see.

Let me explain you. I’ve got a Buy to Let mortgage with Birmingham Midshires (BM, part of the ailing HBOS family) for a 2-bed flat in SE London, a fantastic estate agent (yes, they do exist), a considerate couple with a baby as tenants and a habit for forgetting to pay in the mortgage moneys the day the direct debit arrives. Continue reading

On guessing the collapse of Banco Santander and the Spanish ostrich act

Hobbes, I know that “Spain is different” (or that is what they wanted us to believe), but I am starting to feel really bad news in the horizon. I am no banking expert or economist, but other than the massive unemployment rate that keeps creeping up, the lack of competitiveness (let’s not get into their national haughtiness), and their bizarre definition of competitive markets, the late success of Banco Santander seems to me that is going to end up in tears. Many tears. Continue reading