Tonight:
9°c
What a week it's been for homeowners. First the Government magics up a two-year safety net for borrowers facing mortgage arrears, and the very next day we're treated to another one per cent cut in the interest rate. God - or at least Gordon - is determined to keep a roof over our heads.
But I'm keeping the cut-price bubbly on ice for now. Amid all the declarations that the latest bonanza for homeowners "can only be a good thing", I've discovered a catch or two that give no cause for celebration.
The biggest party-pooper is Alliance and Leicester, my building society. It seems quite determined to hang on to as much of this free money as possible. All year, since interest rates began to fall, I've been harassing them about the cost of my tracker mortgage. It's tied not to the base rate but a standard variable rate, which translates roughly as "any rate we fancy".
So last month, when rates plummeted by 1.5 per cent, the A&L ignored Government advice and passed on only 1.1 per cent to customers like me, one of the meanest amounts among bigger lenders. It seems to me my mortgage is not so much tracking the interest rate as lagging quite far behind it. Consequently, I'm still paying one of the highest tracker rates on the market.
Whammy number two comes when you look at who has actually signed up - in principle - to the emergency rescue deal. Only 70 per cent of borrowers are covered and, you've guessed it, A&L customers are among those who can go whistle.
But the real low shot is that interest-rate cuts are cruel to those of us who saved while the rest of the nation went on a credit binge. By sensibly salting away some salary every month, I've actually helped out the economy. Yet savings rates have been slashed over the past year and it's inevitable they will be again. Already my bank offers less than two per cent on easy access accounts.
Clearly, we can't have it both ways. But for me this is a lose-lose situation. As a saver I'm being penalised and as a mortgage holder I don't fully benefit. There are many thousands of us in the same leaky boat.
I don't pretend to know how to cure our ailing economy but it strikes me that rewarding careful saving over unsustainable spending would be a good place to start. Punishing the thrifty is no way to get ourselves out of this mess.
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