Sunday, Sep 13, 2009
Experts are warning that mortgage rates could soar to 10%
Times: Lenders ignore Bank rate freeze
If mortgage rates continue to increase like this — and they will, the closer we get to the Bank increasing interest rates — we could soon see mortgage rates of close to 10%.
Posted by mark @ 05:01 PM (1310 views) Add Comment
11 Comments
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1. mark wadsworth said...
Even ignoring recent interest rate rises, a bit of simple maths and logic shows that marginal interest rates are already well over ten per cent for loans with higher LTV's.
But good stuff nonetheless.
2. hpwatcher said...
Credit cards are about 22%.
Interest rates will probably revert to something around 12%
3. paul said...
The Bank of England only really has itself to blame. Too much heavy-footed use of the accelerator (with low interest rates) so that now the car's stalled, the accelerator no longer works.
Should we send the MPC members their brown envelopes?
4. new_order said...
All of this ranting and moaning. Let us be grateful, at least we are a democracy.
If the Nazis won we could have ended up in a European single-currency superstate where laws are made abroad and slave labour moves freely and appropriately to serve the higher member countries..........hang on a min......shit!
5. mytimeisnigh said...
I was looking around some show houses this weekend and the representative told me that 80% of people who apply for a mortgage to buy on that estate are turned down by the banks. She also told me not to believe everything I read in the papers with regard to more relaxed lending. Using her advice as a measuring stick, surely this suckers rally will start to drop off soon. Also, some estates that I visited, that had put building on hold, had restarted work... hopefully, increased supply will compound difficulties in the near future.
6. uncle tom said...
This should be much bigger news, but because the BoE rate is stuck on 0.5%, it barely gets a murmer.
My assumption is that the driving force behind this is the cost of renewing the short term mortgage funding that came from the securities markets, as opposed to that sourced from savers.
With falling rents, rising interest payments, and therefore rapidly widening shortfalls; it seems likely that this will force many of the BTL portfolio brigade into default, many of whom must already be running on empty as far as funds are concerned.
7. alan said...
UT,
As for renewal costs...2 year fixed with Halifax is 5.19% for 90-95% LTV (£999 product payment). Probably better to stay on an SVR of 3.5% for the next 2 years if you are an existing borrower?
8. drewster said...
I don't quite understand it. Three years ago, banks' lending margins were ultra-thin as they competed for market share. Now all the banks have fattened up their margins - even lenders who weren't crunched, like Tesco's. Why isn't Tesco's offering cut-rate loans or high-rate savings? They could take over a large portion of the market!
9. icarus said...
on mw's site: "Jesus' surname wasn't Christ, it was Cohen".
OK, so he had a Jewish surname. But why did he have a Mexican first name?
10. a saver said...
Bring on some realistic IRs!
There must be hundreds of thousands of people sitting in houses that they should never have been able to afford, except for ridiculously low IRs, which they are totally dependent on now. And these low IR junkies have this government's full support. And Brown's propaganda machine telling them that house prices are starting to go up again so they sit it out in the hope of a fat profit (or a smaller loss if they bought more recently).
11. mark wadsworth said...
@ Icarus, LOL.