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Interest Rate Update

Jamie_G

Portimao
Joined
13 Apr 2006
Messages
4,311
Interest Rate Update.

Bank Base Rate (used by me) remains unchanged at 5.25% at todays MPC meeting.

Finance House Base Rate (used by dealers and Porsche Financial Services) increased to 6% at the beginning of March.

We remain very competitive versus dealer offered finance not least due to increasing margin between base rate used (which usually tracks 0.5% different)


Migration info. Legacy thread was 123105
 
Just a silly question Jamie, dose our car finance payment go up and down depending on the base rate, like out mortgage, or was it set to the rate at the time when we first took out the finance?

Migration info. Legacy thread was 123129
 
The payments are set on the rate at the point of inception in so much as they never change however your deal is variable rate and effects of rate change effects the balance outstanding = rising or falling balloon. This is called Lease Purchase Balanced Payment Plan

The reason why we use variable rate is so that you can pre-settle early with no/minimal penalty whereas with most fixed rate products the finance company has a right to charge you all the outstanding interest i.e. full penalty / no rebate.


Migration info. Legacy thread was 123143
 

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