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" Mortgage Rates To Fall After Bank U-turn "

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http://www.thisismoney.co.uk/news/article....mp;in_page_id=2

Mortgage rates to fall after Bank U-turn

Philip "Phil" Scott, This is Money
19 September 2007, 2:29pm
Homeowners should see mortgage rates fall after the Bank of England announced it would inject £10bn into the money markets in a bid to make lending between banks cheaper.
The Bank's aim is to help reduce the three-month inter-bank lending rates, known as Libor.
The move would have the knock-on effect of lowering variable rate mortgage costs.

Look up, what's that sound we hear? Its helicopters dropping billions of pounds onto the miracle to breath new life and more HPI into the wobbling economy.

"The housing market appears to have reversed its recent declines and is seeing a new burst of energy as buyers flock back to estate agents armed with cheaper mortgages to snap up bargains following recent falls in house prices of up to 0.2%..."
Edited by Realistbear

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I don't know whether to cry over my tax contributions being used to continue the property owners dream boom...

or laugh at this part "bargains following recent falls in house prices of up to 0.2%"

0.2% is a bargain? haha Don't make me spit my coffee out now.

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but RB where is this 10bn coming from?

Reuters news report said Gordon is printing at levels not seen in 16 years. He is desperate to keep the ship afloat and will risk inflation in the process. The miracle was about to collapse and he pulled the last rabbit* out of the hat: money supply growth.

________________

* IMO immigration may not work for much longer as jobs will be lost and its getting a bit of a hot political potatoe anyway.

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yeah that 10bn is going to make aaallll the difference. I can see speculators doing rather well Soros style.

I expressed similiar fears on another thread. I compared it to a teenager announcing the address of a party on my-space

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Another reason why mortgage rates will fall soon is that swap rates have fallen considerably.

Swap Rates

Every swap is now cheaper than 6 months ago.

Fixed rates mortgages over 2,3 and 5 years will plummet.

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I was under the impression that in order to sell MBS paper, there was now a risk premium- or has the risk gone away today

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I was under the impression that in order to sell MBS paper, there was now a risk premium- or has the risk gone away today

Risk premiums are are built into the rate. As the risk premium evaporates, so does the swap rate.

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So basically, "banks won't lend to each other" is a pack of lies.

Just wasn't cheap enough for the banks, and they want to carry on screwing the borrowers for as much as they can, and now the taxpayer funding the rigging of market rates!

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I guess that's up to each individual bank. But the market is very competetive.

Thanks- what do you expect- 2% or less?- I am expecting the answer "less"

Edited by Bloo Loo

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Less. A lot less, but it depends on client and LTV.

are you implying a tightening of criteria for the coming period?

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The 10 billion is at penal rates so it would not cause mortgage rates to fall by any stretch of the imagination ! THe fundamentals if anything are getting worse.

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http://www.thisismoney.co.uk/news/article....mp;in_page_id=2

Mortgage rates to fall after Bank U-turn

Philip "Phil" Scott, This is Money
19 September 2007, 2:29pm
Homeowners should see mortgage rates fall after the Bank of England announced it would inject £10bn into the money markets in a bid to make lending between banks cheaper.
The Bank's aim is to help reduce the three-month inter-bank lending rates, known as Libor.
The move would have the knock-on effect of lowering variable rate mortgage costs.

Look up, what's that sound we hear? Its helicopters dropping billions of pounds onto the miracle to breath new life and more HPI into the wobbling economy.

"The housing market appears to have reversed its recent declines and is seeing a new burst of energy as buyers flock back to estate agents armed with cheaper mortgages to snap up bargains following recent falls in house prices of up to 0.2%..."

Get used to it guys. If you want to live in the UK then you must understand how it works *now*. If you are one of the lucky elite with a house that you love and no debt then you are very fine. All the rest of you here (assuming you still live in UK now and in Y+2) are royally screwed :)

This is the new age of the new people and the new paradigm. Web 2.0 as never imagined before. The archaic ones who still believe that a lump dug out of the ground on the labour of the whip on the back of the negro will restore a "balance" are incredibly and increasingly odd.

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Look up, what's that sound we hear? Its helicopters dropping billions of pounds onto the miracle to breath new life and more HPI into the wobbling economy.

How much would £10bn weigh in £20 notes?

Edited by refusnik

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