Negative Interest Rate effect

July 28, 2016 by in category Mortgage News with 0 and 0

Letter to 1.3 million combined business and commercial customers have been written by Natwest and Royal Bank of Scotland warning they may have to charge them to hold deposits as a result of low global interest rates.

The BBC reports that if this happened it would effectively be the first time UK banks had negative interest rates.

The letter says: “Global interest rates remain at very low levels… this could result in us charging interest on credit balances.”

Personal customers are not affected.

But of course this will have an affect on mortgage interest rates

In a statement RBS says: “We will consider any necessary action in the event of the Bank of England base rate falling below zero, but will do our utmost to protect our customers from any impacts.”

With the Central bank saying that it was more like August now, markets were expecting the Bank of England to cut the base rate earlier this month.

The interest rate has been at 0.5 per cent since March 2009.

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THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

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