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Woolwich Act To Remove Cheap Mortgages

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Cheap fixed-rate mortgages disappearing

Hilary Osborne

Wednesday May 10, 2006

Competitive fixed-rate mortgages look set to disappear in the near future as expectations of an interest rate rise grow, mortgage lender Woolwich said today.
The bank, which is launching a new range of tracker mortgages, said rising money market rates - known as swap rates - meant it was becoming increasingly expensive for lenders to offer low fixed-rate deals.
"Swap rates have been going up for a couple of months now, so we've seen several lenders reprice their rates upwards - some three or four times - over the past few weeks, and
there will be more rises to come," said
Ray Boulger, senior technical manager at broker John Charcol.

The market adjusts to the new reality--swap rates--as the days of low IR dissappear. As this together with high employment was propping up the bubble what's left to keep it from crashing rapidly? Gordon's Bull Sh#t?

Edited by Realistbear

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I noticed last week that the adverts in the banks had changed to tracker mortgages.

I think one advert even had the caption

'Permanently low rates for the lifetime of the mortgage*

* Tracker rate fixed at 0.14% above the base rate'

Or something very like it. At the time I thought it would be worth taking a photo if you were going to take one out. I am sure that in the future some people will feel very hard done by if they cant afford the repayments.

I read on The Fool website about some people in this country that had taken out US tracker mortgages when their rates were 1 or 2%. They wernt too happy to say the least.

If the base rates go up there wont be any sub 5% deals left out there and I think this could be a big psychological barrier.

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