PowerSwitch

Why is it that the BofE interest rate is merely 0.5% but they will charge 7.5%?
On our small amount of savings we struggle to get even 0.5%.

Something is wrong somewhere.

7.5% is extremely high for a loan to someone who, presumably, owns their place. Surely most people would just take out some more on their mortgage and get, ooh, about 3%?

The difference between the 0.5% bank rate and the 7.5% loan charge represents a transfer payment from households to the banking industry. It's why bankers get paid more than builders.

In Germany their Green Deal comes at a less than market rate on near 1%. But we wouldn't want to have an intelligent policy on energy like Germany, would we?

At the LEAF conference a couple of weeks ago I suggested to a senior civil servant at DECC that if the GD loan rate was in the 6 or 7% region, take up would be low as people would find cheaper ways to insulate their houses. She agreed with me. She was very definite in saying their was zero chance that the Treasury would allow less than commercial rates while deficit reduction was the government's priority. She said that as far as she was concerned she didn't care who or how the work of insulating buildings was paid for so long as the job was done. If the Green Deal encouraged people to find other ways to pay for the work that would be just fine.

There is, importantly, the Energy Companies' Obligation (ECO), which is a mechanism by which the Big Six pay poor people in hard-to-heat houses to improve energy efficiency. This is a transfer payment from all households to some poor people.

See my website at http://www.greendeallouth.org.uk/

An interest rate of 7.5% means that the Green Deal won't be taken up. Basically instead of investing in your house, over half of your payments will be going to finance companies.. It just beggars belief that we should be transferring even more wealth to finance companies rather than investing it in the housing stock.

The government could easily have done something like they have done in Germany (using a Green bank to give very low interest loans) but our government is in the pockets of the bankers so we get this solution which quite frankly don't work (and dont get me started on the golden rule etc)

I think the subsidised insulation is no longer available from the big DIY shops. So where do people find affordable alternatives to the Green Deal? I think doing nothing is the most likely alternative.

rightee wrote:An interest rate of 7.5% means that the Green Deal won't be taken up. Basically instead of investing in your house, over half of your payments will be going to finance companies.. It just beggars belief that we should be transferring even more wealth to finance companies rather than investing it in the housing stock.

The government could easily have done something like they have done in Germany (using a Green bank to give very low interest loans) but our government is in the pockets of the bankers so we get this solution which quite frankly don't work (and dont get me started on the golden rule etc)

+1. So much for 'the greenest government ever'.

JohnB wrote:I think the subsidised insulation is no longer available from the big DIY shops. So where do people find affordable alternatives to the Green Deal? I think doing nothing is the most likely alternative.

For definite? I'd heard that B&Q had pulled their loft insulation offer but thought they might bring it back (it seemed to drop in and out periodically in the past). Actually just checking the website and it appears to be in stock at a couple of stores near me.

Aurora wrote: So much for 'the greenest government ever'.

You didn't fall for that one, did you?

Aurora wrote: +1. So much for 'the greenest government ever'.

Well when they said greenest government ever, they meant the most naive, not the most environmentally conscious

Engineer takes up Green Deal: will blog his progress.