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Rinoa

Swap Rates Fall

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Swap Rates

Swap rates have fallen steadily over the past couple of weeks and are now lower than they were a month ago.

Look out for falls in fixed rates mortgages anytime soon.

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Swap Rates

Swap rates have fallen steadily over the past couple of weeks and are now lower than they were a month ago.

Look out for falls in fixed rates mortgages anytime soon.

yes its because the markets now sense the recovery is not imminent and hence economy needs lower interest rates for longer. i am beginning to think this will play out like japan lost decade.

who knows but it may be that fixed rate mortgages don't become cheaper because banks need bigger margins to rebuild their balance sheets.

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Swap Rates

Swap rates have fallen steadily over the past couple of weeks and are now lower than they were a month ago.

Look out for falls in fixed rates mortgages anytime soon.

Why are the major lenders raising fixed rates then Rinoa, if they can see the swap rate falling?

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Higher IR's are on their way. Maybe not today, maybe not tomorrow, but soon and for the rest of your life.

Swap rates for 3 years hence are still only 2.94%.

The markets are not anticipating dramatic rises anytime soon.

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Higher IR's are on their way. Maybe not today, maybe not tomorrow, but soon and for the rest of your life.

Pay it again Sam!

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Why are the major lenders raising fixed rates then Rinoa, if they can see the swap rate falling?

They are slow to respond, always have been. But in the next 10 days I expect rates to start falling, if only slightly.

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They are slow to respond, always have been. But in the next 10 days I expect rates to start falling, if only slightly.

I am not so sure. I think that swap rates might be an excuse. Nationwide seem to want to price themselves out of New Business.

If you don't have the money to lend, then you don't lend it, so price accordingly. I know someone senior in a foreign bank and they were not loaning any money at all on the commercial side, but still had to say publically that they were open for business.

Still the proof of the pudding and all that, so it will be interesting to see if that comes to pass.

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I am not so sure. I think that swap rates might be an excuse. Nationwide seem to want to price themselves out of New Business.

If you don't have the money to lend, then you don't lend it, so price accordingly. I know someone senior in a foreign bank and they were not loaning any money at all on the commercial side, but still had to say publically that they were open for business.

Still the proof of the pudding and all that, so it will be interesting to see if that comes to pass.

Lenders fixed rates generally follow the trend in swap rates.

If lenders don't reduce fixed rates soon, we'll know they have funding issues or have decided to increase margins.

Possible but unlikely.

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They are slow to respond, always have been. But in the next 10 days I expect rates to start falling, if only slightly.

Swap rates in a part nationalised banking system are meaningless. Risk is borne by the tax payer not the lender. You know this.

Gilt yields are all that matter now. I think the banks also know this.

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In fairness Treasury bull markets and big deflationary depressions go hand in hand.

I wouldn't be beting on high interest rates in the short term, and second guessing interest rates over the medium / long term is a mugs game.

Low treasury yields are not a positive indicator for the economy. They may indicate that everything else is so shite, and falling in price, that govt debt is the turd that floats to the surface.

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Swap rates for 3 years hence are still only 2.94%.

The markets are not anticipating dramatic rises anytime soon.

I get daily swap pricing as part of my job for various different terms (you can also just get out of the FT) and I agree with your 3 year rate of 2.94%, and also the link to fixed rate mortgages. HOWEVER, swap rates have risen quite dramatically over the last couple of weeks (easing everso slightly in the last few days - but much higher overall). Don't have access the info at the mo, but will try to post a graph of 3 year rates for the year in the next few days. Can't understand where you get the fall from...

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Swap Rates

Swap rates have fallen steadily over the past couple of weeks and are now lower than they were a month ago.

Look out for falls in fixed rates mortgages anytime soon.

If I'm reading it reading this chart right (the numbers appear when you move over the bar)

10yr:

Last month: 4.24

23/06/2009: 4.21

25/06/2009: 4.21

Which year should I be looking at for fixed rate mortgages?

Edited by Ash4781

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I get daily swap pricing as part of my job for various different terms (you can also just get out of the FT) and I agree with your 3 year rate of 2.94%, and also the link to fixed rate mortgages. HOWEVER, swap rates have risen quite dramatically over the last couple of weeks (easing everso slightly in the last few days - but much higher overall). Don't have access the info at the mo, but will try to post a graph of 3 year rates for the year in the next few days. Can't understand where you get the fall from...

Here Swap rates covering most popular fixed rate mortgage periods are all down from last month.

If I'm reading it reading this chart right (the numbers appear when you move over the bar)

10yr:

Last month: 4.24

23/06/2009: 4.21

25/06/2009: 4.21

Which year should I be looking at for fixed rate mortgages?

The vast majority are looking at 2,3 or 5 year fixes. There's not much in it, but after rising steeply, they are now all lower than last month, so mortgage rates should return to where they were 4 weeks ago ~ assuming past history repeats itself.

If not, that would be of concern.

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They are slow to respond, always have been. But in the next 10 days I expect rates to start falling, if only slightly.

Sorry Rinoa.... They are slow to react????

You are suggesting they do not bother looking at the current situation when setting policy?

So let’s say for example that swap rates went up massively today after a few week of going down, you are saying they would just completely ignore today’s figures and bring fixed rates down. Is that how it works Rinoa, you know this do you Rinoa.

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Swap Rates

Look out for falls in fixed rates mortgages anytime soon.

Nationwide fixed rates are going up (again) tomorrow, Halifax, Abbey, A & L have already gone up (significantly). Intelligent Finance and Bank of Scotland are no longer going to be doing mortgages, Cheltenham & Gloucester are closing their branches...................

Just so that I can begin to take you (and your statistics) seriously please let us know when you think the fixed rates will go down so that we can monitor these.

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Gilt yields are up - look for rising fixed rate mortgages. ;)

Thats what i think too. I keep hearing the 'wholesale market is still effectively closed' which i presume to mean the banks still arent lending to each other (and why would they when the govt will do it on better terms)

then you read things like this

http://ftalphaville.ft.com/blog/2009/06/22...bor-is-useless/

How long till people just start going directly to the BoE for mortgages?

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swap_rates.jpg

Graph of 3 and 5 years swap rates. Missing the last couple of days data where there were slight falls. Seems an upward trend to me from Feb -> not surprising fixed rates are going up.

The chart I linked to here clearly show swap rates for 3 and five years lower than a month ago. Your graph says they are currently 0.5% higher.

I'm not sure why there is a discrepancy.

Edited by Rinoa

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