Jump to content
House Price Crash Forum

Cheap mortgages have ended.


Recommended Posts

  • Replies 107
  • Created
  • Last Reply

Top Posters In This Topic

Top Posters In This Topic

Posted Images

1 minute ago, Si1 said:

why does this make mortgages more expensive?

The Banks are now incentivised to generate more profit - spending money on themselves - so have less appetite to lend to risky borrowers

Link to comment
Share on other sites

2 minutes ago, Si1 said:

why does this make mortgages more expensive?

I must admit had to think about the link. But could it mean free money obtained by private banks instead finds it ways into share buy backs and dividend payouts leaving less money sloshing around to lend for home purchases?

Link to comment
Share on other sites

2 minutes ago, tep1 said:

I must admit had to think about the link. But could it mean free money obtained by private banks instead finds it ways into share buy backs and dividend payouts leaving less money sloshing around to lend for home purchases?

I'm guessing so. Over covid then the only game in town was day to day high street banking, hence they got very competitive over mortgage interest rates.

however, I will see if this actually leads to higher mortgages or not - don't forget the previous base rate drop will still technically be feeding through to high street rates now so we may simply not see it

Link to comment
Share on other sites

26 minutes ago, Si1 said:

why does this make mortgages more expensive?

 

22 minutes ago, msi said:

The Banks are now incentivised to generate more profit - spending money on themselves - so have less appetite to lend to risky borrowers

They can pay out cash as divis.

Or send it back to their parent co - HSBC. HSBC have been destroying margins in UK mortgages.

Banks have had very littlle choice with what to do with the cash they earn elsewhere, so have been forced to lend it out at v low rates mortgages.

https://www.thisismoney.co.uk/money/markets/article-9679467/Big-banks-5bn-loan-windfall-boost-dividends.html

 

Link to comment
Share on other sites

55 minutes ago, spyguy said:

 

They can pay out cash as divis.

Or send it back to their parent co - HSBC. HSBC have been destroying margins in UK mortgages.

Banks have had very littlle choice with what to do with the cash they earn elsewhere, so have been forced to lend it out at v low rates mortgages.

https://www.thisismoney.co.uk/money/markets/article-9679467/Big-banks-5bn-loan-windfall-boost-dividends.html

 

so if they have spare cash they can drop rates, no?

Link to comment
Share on other sites

1 hour ago, Si1 said:

so if they have spare cash they can drop rates, no?

Think of the big UK banks who didnt go bust - all two of them, HSBC and Barclays.

They have other money making activities and sources of cash esp, HSBC whove had $$$ channelled from HK/China.

For the last 10 eyars, this cash has been rolling in and put n its balance sheet.

What do they do with it?

Cant put it in bonds - too low..

Cant park in CB - negative rates.

So they need somewhere to park it to get some return, no matter how small.

Thats why HSBC were the first to offer very low rates mortgages, forcing all the other UK lenders to compete.

However .. to get that very lowrate you need to put 40% down and have a spotless credit record.

 

 

 

 

Link to comment
Share on other sites

13 minutes ago, spyguy said:

Think of the big UK banks who didnt go bust - all two of them, HSBC and Barclays.

They have other money making activities and sources of cash esp, HSBC whove had $$$ channelled from HK/China.

For the last 10 eyars, this cash has been rolling in and put n its balance sheet.

What do they do with it?

Cant put it in bonds - too low..

Cant park in CB - negative rates.

So they need somewhere to park it to get some return, no matter how small.

Thats why HSBC were the first to offer very low rates mortgages, forcing all the other UK lenders to compete.

However .. to get that very lowrate you need to put 40% down and have a spotless credit record.

 

 

 

 

 

Barclays also went bust but got illegal bailout from the Qatari royal family.

Link to comment
Share on other sites

2 hours ago, Roman Roady said:

This sort of thread is why I have enjoyed this web site so much over the past few years.

Used to be a poster on here. Oldies will remember him.   

?...!   

He was insightful and inspirational. Oh i do miss him......

Link to comment
Share on other sites

35 minutes ago, spyguy said:

Think of the big UK banks who didnt go bust - all two of them, HSBC and Barclays.

They have other money making activities and sources of cash esp, HSBC whove had $$$ channelled from HK/China.

For the last 10 eyars, this cash has been rolling in and put n its balance sheet.

What do they do with it?

Cant put it in bonds - too low..

Cant park in CB - negative rates.

So they need somewhere to park it to get some return, no matter how small.

Thats why HSBC were the first to offer very low rates mortgages, forcing all the other UK lenders to compete.

However .. to get that very lowrate you need to put 40% down and have a spotless credit record.

 

 

 

 

so basically over the past year they've had nowhere to store their cash so they lent it out competitively. But what was the difference that made to mortgage rates? hard to tell given BoE dropped rates too...

Link to comment
Share on other sites

Mortgages have never been so cheap, less then 1% - basically your being paid to borrow. the trend is still flat or even down

 

Personally I'd so for the longest deal you can find with low redemption 

 

image.png.8b6fc9162b7026b70f2605923f5b56e4.png

Link to comment
Share on other sites

4 hours ago, msi said:

The Banks are now incentivised to generate more profit - spending money on themselves - so have less appetite to lend to risky borrowers

Then the title should read, "Cheap mortgages have ended for pissy poor people who have awful LTV levels" 

Us in the 10%-50% LTV camp still have thousands of cheap deals, because the market can fall 50% , and they can still sell our house and get 100% back if we default. 

Link to comment
Share on other sites

1 hour ago, zugzwang said:

 

Barclays also went bust but got illegal bailout from the Qatari royal family.

Well, Ill rephrase that - avoided going bust by getting a dodgy loan from Arabs.

It avoided coming under UKGOV control, fair or foul.

Link to comment
Share on other sites

28 minutes ago, GenZ said:

Mortgages have never been so cheap, less then 1% - basically your being paid to borrow. the trend is still flat or even down

 

Personally I'd so for the longest deal you can find with low redemption 

 

image.png.8b6fc9162b7026b70f2605923f5b56e4.png

There was a period ~5 years ago you could get a very cheap 10 year fix from HSBC

I was tempted but went for a 5 year fix instead.

10y fixes have long gone from HSBC.

 

Link to comment
Share on other sites

22 hours ago, GenZ said:

Mortgages have never been so cheap, less then 1% - basically your being paid to borrow. the trend is still flat or even down

Personally I'd so for the longest deal you can find with low redemption 

image.png.8b6fc9162b7026b70f2605923f5b56e4.png

We got 1.39% fixed for 5 years on a 55% mortgage, £999 fee last autumn.  I thought we'd borrowed near what would be the cyclical low.
Apparently I was wrong.
We've bought a probate wreck and have gutted, restored and improved it from sewer to ridge.  All the services are new.  Borrowed cheap and still have some savings even after the murderous cost of building, electrical and heating work in the Pandemic, and we both have good pensions.

We should be sitting pretty with retirement coming in a few years, yet I have the constant feeling that everything is about to go tits up due to other people's f**k ups.  Depressing and annoying.

Maybe its just Covid blues and spending too much time with the doomsters on here😄

Edited by hotblack42
punktuation
Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
 Share

  • Recently Browsing   0 members

    No registered users viewing this page.





×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.