Tuesday, Sep 25, 2007
11.5 % Interest rate????
Thisismoney: Mortgage rates soar as credit crunch bites
Some firms specialising in mortgages for those with a patchy credit history have pushed up loan rates to an astonishing 11.5% - double the Bank of England base rate.
Posted by cold6k @ 10:47 AM (414 views) Add Comment
3 Comments
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1. also sold to rent said...
This is where the action is. With crazy multiples and wafer thin margins on rates for dodgy borrowers going out the window, demand will surely fall. Just at more of the BTL crowd start to increase supply as they head for the exit. 2008 is likely to be very flat me thinks.
2. uncle tom said...
I just checked out the Northern Rock site - you'll pay an APR of 8% + now for a BTL loan, and for regular mortgages the income multiple is only about 3.6 now.
There are going to be massive numbers coming off fixes who will be trapped on punitive SVR's, or obliged to pay vastly higher interest rates.
The rot has set in...
3. alan said...
The rates double when there is a likelyhood that the debts will be difficult to collect or the loan will not be repaid at all.
I once knew a loan shark that would lend to desparate people. The rate was 50% to be repaid in 3 weeks. This was not as profitable as it first appears, as much of the gross profit was employed on "collection costs".