Friday, Feb 13, 2009
Fixed rate mortgages starting to rise - looking at inflationary an future?
Telegraph: Mortgages: 'There will never be a better time to fix'
Lloyds Banking Group, the owner of the UK's biggest lender, Halifax, and Cheltenham & Gloucester, has called the bottom of the fixed-rate mortgage market. The newly formed bank says the indications from the money markets are that fixed rates will not fall any lower.
This poses a dilemma for many home owners who are already paying rock-bottom interest rates on tracker mortgages or loans with low standard variable rates (SVRs). These borrowers will find themselves paying more if they switched to a fixed rate now, but if Lloyds' prediction proves correct they could end up the losers when Bank Rate starts to rise.
Posted by tyrellcorporation @ 03:39 PM (906 views) Add Comment
9 Comments
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1. tyrellcorporation said...
Ooops sorry for aberration in title but I'm doing 14 hour days at the moment (brain melting!). TC
'looking at an inflationary future?'
2. mountain goat said...
Maybe this is a stupid but...
I think we can get high interest rates with low inflation. How? If lenders consider everyone a bad risk because we are in a deflationary depression then they will demand high return, high interest rates, in return for taking that risk. This is true for government borrowing as well. If there is a buyers strike, or fear of high inflation in 10 years time, then bond rates will go up high, even though we currently have low inflation for one or two years.
Maybe this explains why banks don't lend. If the banks would charge say 15% interest on a mortgage then there might be more incentive for them to lend in this environment of falling house prices and rising unemployment.
3. Cheekie Charlie said...
Headline should read: Houses: "There will never be a worst time to buy"
4. Fed Up said...
For once an article related to the HPC. I agree with the sentiment of the Torygraph article. Mortgage rates have reached rock bottom, although house prices haven't. When to dive in?
5. little professor said...
Problem is today's fixes aren't much better than those you could get back when the base rate was 4-4.5%
6. jackas said...
There will be no lending until the government stops fixing the price of money.
They seem to have forgotten it's a commercial activity rather than a human right.
7. bidin'matime said...
They've given up on capaitlism and reverted to their innate socialism - we'll have five year tractor plans next.
8. bidin'matime said...
That's 3 times it's done that!! Can anyone tell me how to stop my new computer reposting comments I posted days ago, when I click on a link to read comments??
9. mountain goat said...
bidin'matime - that is stange. Have you tried clearing your history and cache? You can do it in the "Tools" of your browser, might help.