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Mortgage Rates Fall During October

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Mortgage rates continued to fall during October as lenders tried to tempt homeowners to remortgage, figures have shown.The average cost of a tracker loan fell for the third consecutive month to hit a new record low of 3.5%, according to the Bank of England.Interest rates charged on two-year fixed rate mortgages for people with a 25% deposit dropped to 3.72%, the second lowest level since records began in 1995, while the typical cost of a five-year fixed rate mortgage fell by 0.19% to a five-year low of 4.85%.The decline in mortgage rates came despite the fact that swap rates, upon which fixed rate loans are partially based, ended the month slightly higher than they started it.Instead, the fall is thought to have been driven by increased competition among lenders, who are trying to tempt homeowners to remortgage off low standard variable rates (SVRs).A number of lenders have launched deals in recent weeks that are specifically aimed at people who are remortgaging.Michelle Slade, spokeswoman for financial information group Moneyfacts.co.uk, said: "We are seeing a bit more competition back in the market as lenders want to do more lending."They are trying to kick-start the remortgage market. Many people are on low SVRs and have no reason to move."But despite the recent decline in mortgage rates, the cost of home loans still remains high in relation to both the Bank of England base rate and swap rates.Swap rates had been steadily falling during October, but rose sharply towards the end of the month following stronger than expected third quarter GDP data, which prompted speculation that interest rates may rise sooner than previously expected

Have to fear for the lenders at the fringe as lenders' margins shrink in a competitive frenzy. How far do they have to go before demand gets kick started? give them away at below cost?

I suppose with low rates though the impairments are distorted.

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Have to fear for the lenders at the fringe as lenders' margins shrink in a competitive frenzy. How far do they have to go before demand gets kick started? give them away at below cost?

I suppose with low rates though the impairments are distorted.

Worse, if a bank LIES about its financial position, then what to stop it LYING to investors about the quality of their loans....meanwhile, if they fail to vet loans and drop rates, they know they can get a bail out from the authorities to cover up.

this means Mr Honest Banker cant compete, and we have FRAUD dictating to savers and investors and increasing the inevitability of more taxpayer support in terms of direct cash and in terms of QE.

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Have to fear for the lenders at the fringe as lenders' margins shrink in a competitive frenzy. How far do they have to go before demand gets kick started? give them away at below cost?

I suppose with low rates though the impairments are distorted.

It was always likely that as volumes fell margins would be cut... people often forget that the income ( and bad debts) generated from lending books is one thing but in many cases without the fees that new lending or re-financing generates lenders would go out of business....... where volumes get low lenders are happy to reduce their marigns on borrowing in the hope of generating more business and more fee revenues.

I have always thought that those who look at current margin levels and believe that they will not reduce are not thinking straight, lenders will always try and generate more business through reduced lending margins where volumes are small as otherwise they will effectively signaling their exit from the market.

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OP what's the source for this information?

If this is indeed correct then this statement '...trying to tempt homeowners to remortgage off low standard variable rates (SVRs)' is hardly going to wash with many people out there. I know one guy currently on his lenders SVR which is set at 0.14% above BOE base for the term. Hasten to say he's in no mood to re-mortgage atm ;)

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With an inflation rate above wage inflation, and saving rates below inflation will the fixed LTV floors (25%) not mean demand will continue to fall? (transactions trend lower as more shut)

Or would lenders really start writing mortgages with rates below inflation (in short term) ?

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  • 245 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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