Wednesday, January 23, 2008

And while the Fed cuts, UK borrowers are squeezed yeah!

Nationwide mortgage rates 'raised for some products'

Certain mortgages provided by Nationwide will have higher rates from January 23rd, the building society has announced. For example, a two-year tracker with a £599 fee which used to have a 5.58 per cent rate is now on offer at a rate of 5.68 per cent. Meanwhile, a lifetime tracker with no fee will be provided at a 5.89 per cent rate, having previously had a 5.74 per cent rate. What did StuarzLaw say?

Posted by confused76 @ 08:37 AM (840 views)
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6 thoughts on “And while the Fed cuts, UK borrowers are squeezed yeah!

  • Rates are still simply too low….and there is a recession on the way, not what Gordon Brown wants but tough shit.

    Rates will still come down and he will put a lot of pressure on Nationwide and Halifax to pass them on. Remember he said ”Banks have a duty to pass on cuts in the base rates”.

    Bast*rd.

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  • ”Banks have a duty to pass on cuts in the base rates”

    Banks have a duty to their shareholders, pure and simple. The great god profit will win over.
    They couldn’t give a s**t about Crash Gordon or homeowners.

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  • That’s funny as the healine in the London Evening Stranded was “Mortgages to drop” plastered all over it. Comfused dot con ?

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  • C'mon Correction says:

    Bascially what’s happening is that the base rate will fall slightly but that won’t affect mortgage interest rates because the banks are raising their margins in order to protect against bad debts and to re-price risk. The price of risk isn’t going to go as cheap as it did over the last decade for a long long time, that is the biggest effect of the credit crunch and won’t be magically healed by any action.

    If BOE do cut rates and let inflation fly, am i right in thinking that high inflation will erode into bank profits/investments more and they will need to increase their interest rate margins even more in order to protect their profit margins??

    Thus decreasing rates is quite a blunt tool in the current environment?

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  • Several lenders not just Nationwide have been increasing their rates for purchases and re-mortgages on BOE tracker mortgages typically by 0.2% – so not much opportunity to take advantage of the BOE December 0.25% cut. Associated mortgage fees are up and loan to value generally down which means tougher times ahead for mortgage holders/borrowers.

    Mr Brown & Mr Darling would do well to remember that the lenders are commercial organisations who’s primary objective is to make a profit and provide a return to shareholders. They are under no obligation to pass on rate cuts (unless it forms an explicit part of the mortgage contract)

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  • Mr Brown & Mr Darling would do well to remember that the lenders are commercial organisations who’s primary objective is to make a profit and provide a return to shareholders. They are under no obligation to pass on rate cuts (unless it forms an explicit part of the mortgage contract)

    I agree Jack c, but they will jump at the chance of dropping their savings rate at the mere sniff of a rate cut. Save don’t spend, in a few months time, you won’t be able to do one and there will be no point doing the other. No more boom and bust, what an @rse.

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