Tuesday, Nov 20, 2007
More credit crunchy nut
Times Online: Brokers predict the end of ultra-low rate mortgages
confused76 posted this in a comment on another article, I felt it was worth sharing on the main blog. "The best two-year fixed rate you can get is 5.48% from Giraffe Money. Lenders are becoming more cautious in light of the credit crunch and many will look to widen their margins and add an extra layer of protection in the coming months."
Posted by drewster @ 02:14 PM (975 views) Add Comment
11 Comments
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1. tyrellcorporation said...
Simply borrowing from a company called Giraffe Money would make me nervous! The big lenders are nowhere near these rates so this should be reason enough to steer clear.
2. confused76 said...
The one below may not deserve a new post but it is too funny
http://business.timesonline.co.uk/tol/business/industry_sectors/construction_and_property/article2908113.ece
Judith Heywood may soon find herself out of a job and she knows that, but she ll be in good company with David Smith, Rosie Millard etc
3. crash bandicoot said...
What has happened to "buy to leave" I haven't seen that mooted as an investment strategy for a while!
4. Jonb said...
Tyrell corporation
There is no need to be nervous as a borrower. If they go under, that's not your problem. You just continue to pay the 5.48% as it falls due.
As a lender to them or a shareholder, that's a different matter, then you should be nervous.
5. confused76 said...
more Try To Let borrowers will be turned away
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article2907699.ece
6. drewster said...
@confused, I like the link to Judith Heywood's article. The best line is: "Owners will simply hold off selling if they can’t secure a price they are happy with, and the reduced number of homes for sale should keep prices high."
That shows a remarkable lack of understanding of how the market works. Try substituting in Northern Rock shares and see how that same sentence sounds: "Shareholders will simply hold off selling their Northern Rock shares if they can't secure a price they are happy with, and the reduced amount of shares for sale should keep prices high."
7. stillthinking said...
I'm going to limit the supply of my used toilet paper to one sheet for sale every year on January 1st.
Coming up soon!
8. the northerner living in oz said...
Just sit back and watch the housing market grind to a halt
before the full on panic sell sell begins
9. dohousescrashinthewoods said...
Beautifully put, drewster.
Wile E Coyote, Captain Caveman - icons of the day.
10. talking rot said...
I can not believe Mervyn King said that interest rates would fall by 0.5% in the New Year. I suspect the article does not accurately report the context and that he added some heavy caveats to his forecast of the future direction of interest rates. I can see any further cuts in the UK's interest rates adding to inflationary pressures as a result of a falling £.
11. New User 2007 said...
He is saying that the economy will slow so sharply that interest rates need to be reduced i.e. a weak ecoomy means inflation could drop too far the target 2% in 2009 if rates are not reduced in 2008 (there us a lag before interest rates impact the economy so interest rate changes in 2008 will feed into the economy in 2009).
Given that repossessions are already rising, and that financial groups who provide global liquidtiy will need to rebuild their capital bases and their trust in each other, lower mortgage rates are some way off. I suspect that repossessions will get even worse as the economy does next year.
He is understandably panicking given the US is heading for a recession next year. The drip drip of bad news is impacting on confidence of many (except some ignorant BLTs..the most dangerous types of all).