Friday, Jan 26, 2007
Borrowers hit as lenders leapfrog latest base rate
FT: Borrowers hit as lenders leapfrog latest base rate
Millions of homeowners with variable rate mortgages are being hit with excessive increases to their monthly repayments, as many of the UK’s largest lenders have raised interest rates more than the recent base rate rises.
Posted by umisenyamasen @ 05:17 PM (177 views) Add Comment
4 Comments
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1. headmelter said...
What the most interesting fact for me is the reason given is that lenders are "pre-empting" another rate rise.
up up and away I say.
2. Nasha said...
I think they have increased their margins to compensate not only for anticipated rate rises in the future, but also to cover the cost of increase in IVA's and repo's. So large number of poeple who are sensible and have not overstretched themselves and not got caught up with trying to make money from a trend will start to pay those that have.
3. Denzil said...
The reason Lenders can get away with this is either they have a cartel or the good old British public are too lazy to switch to a better deal or cannot because they are locked in. I know people who are just on the SVR because they are not aware that they can sign up to some kind of fixed or variable product and the lenders are certainly not helping them become aware.
4. sirgoogle said...
This is just the start. Even if interest rates drop later in the year, those on fixed rate will face rises on renewal of their rate at the end of the fixed rate term. The banks will want to claw back their losses (with the interest that the banks lost) over the intervening period. This is what happened in the last bust.
The banks never lose.
The pips will be squeaking for a while.
Anyone know the proportion of mortgagees on 1, 2, 5, and 10 year fixed rate deals??
I pity the 10 year fixed rate deals as these will hurt the most of all.