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Mortgage Rates Keep Going Up

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Just got off of the phone from speaking to a mortgage broker; I had a quote provided on the 14th January for 4.6% fixed for 5years on an 80% LTV.

This has now jumped by 20% to 5.6%!!! Wish house prices adjusted downwards this fast.

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Who needs the BoE?

Definitely worth reading FreeTrader's Treasury Committee Meetings - 1St March 2011 Post

...

Mervyn King: The biggest threat in my view, as I said before, is how sustainable will this very low level of long-term real interest rates be. That is not something that is set in this country. It is a worldwide phenomenon and we have no control over it, although we can discuss with our colleagues in the G20 what the risks are.

I think at home there is no doubt that because of that the high level of asset prices relative to income flows has brought about a problem for people who want to get into the housing market, there is no two ways about it. There is an adjustment process then in which people have to save first to acquire the deposit in order to buy a house, which relative to income is much more expensive than it used to be. Of course, in turn, when they get to the end of their lifetime they will be bequeathing a much more valuable asset than they would have before.

In the short run, because we have not gone through a period when the mortgage rate dulled, then that has led us to a situation in which these problems of repossessions and mortgage arrears are much less severe than they were in the early 1990s. The point that I would make that ought to give us some comfort I think is this: one of the reasons why we cut bank rate to such a low level was because we knew that the banks would still be charging healthy positive rates to borrowers because they could not borrow at 0.5%. The banks were paying a hefty premium on bank rate to get hold of funds, so mortgage rates and borrowing rates in general did not come down anywhere near as fast as bank rate came down.

When we come to put bank rate up, at a point when we are wanting to move bank rate back to more normal levels, that is surely likely to be at a point when the banking system is in a healthier condition and can borrow at rates closer to bank rate, so that the increase in effective borrowing rates will not be anywhere near as big as the actual increase in bank rate, and that is-

Q43 Mark Garnier: So what you are saying is that you are adjusting the tilt of the short-term yield curve.

Mervyn King: It is the difference between the rates at which different categories of people can borrow, and rates to borrowers did not come down all the way to zero. Rates to savers did, sadly, but rates to borrowers did not. Equally, when it comes to putting up rates, we would be thinking that it was sensible to move rates up, in part because the borrowing rates would not go up one-for-one with the increase in bank rate. That is at a point we have not yet reached, where banks are able to return to more normal funding conditions, and we are still quite a way from that.

...

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OP go to another mortgage broker for advice or stick with same one and ask them to hunt out another similiar mortgage product that was on offer to you almost 2 months ago.

This is a whole of market broker, I'm not directly impacted as I'll delay purchase; I'm under no pressure and will choose not to take it (my wife actually gets it).

I'm more surprised by the jump in rate without the BOE doing anything; guess it shows how well UK debt is rated and how fast its rating is changing.

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This is a whole of market broker, I'm not directly impacted as I'll delay purchase; I'm under no pressure and will choose not to take it (my wife actually gets it).

I'm more surprised by the jump in rate without the BOE doing anything; guess it shows how well UK debt is rated and how fast its rating is changing.

This is before savers decide that holding money anywhere or in any currency is prefereable to one's own where continual QE / ZIRP are deisgned to benefit just the banks and debtors.

Once pretty much the whole fo the rest of the world are working on real interest rates then a wide basket of currencies would look like a much better bet.

Edited by OnlyMe

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Wish house prices adjusted downwards this fast.

I officially gave up today.

The cash I have been saving to trade up when house prices correct is being diverted to a stakeholder pension instead. HPC aint happening anytime soon.

I am being robbed on my savings to bail out the 4 bed detached with white Audi on the drive brigade

At least I get some tax relief on the pension contribution

Probably wouldnt occur to a public sector worker to pay for their own pension like me, but hey ho I'll be a good boy and take some burden off the state - someone has to

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Just think how bad it would be if it wasn't for the bailouts.

House prices would have been at 1997 or less levels by now. Of course many of them would have had boarded up windows and split beans on the streets :ph34r:

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This is a whole of market broker,

I'm looking for a mortgage to buy a house at the moment. Am I right in my assumption that brokers are now a complete waste of time. It takes 30 seconds to go to www.moneyfacts.co.uk and look at their best buy tables and I've never found a broker that can offer anything better. I suppose it helps that I'm looking at about 60% LTV so the banks are actually quite keen to lend to me.

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I'm looking for a mortgage to buy a house at the moment. Am I right in my assumption that brokers are now a complete waste of time. It takes 30 seconds to go to www.moneyfacts.co.uk and look at their best buy tables and I've never found a broker that can offer anything better. I suppose it helps that I'm looking at about 60% LTV so the banks are actually quite keen to lend to me.

Yep, its where the brokers get their info.

In my eyes the only resosn people when to a broker was to be told how to lie about their income on the aplication forms :blink:

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  • 284 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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