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Short Term Swap Rates Trending Up...

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http://www.swap-rates.com/UKSwap_extended.html

CTRL+F5 to refresh and show 20/07/07 rates.

1 year swap now at 6.39%. If this is with a typical 0.15% margin, the market is pricing in 6.25% by all but 0.01%.

It all points to an enconomy about to overheat in the next 12 months and slide headlong downwards after that...

We may see 1-3 year rates over 7% by the end of the year.

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Mortgage swap rates are the price of borrowing money for a mortgage. You have to look at historical data to try and determine how much above the base rate they typically are, but basically if they're higher than the base rate, it means the base rate is expected to go up.

Essentially, banks / building societies cannot lend below it or they'll make a loss. To cover their overheads they'll need to charge a higher rate, or recoup the money in fees etc.

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