Tuesday, March 18, 2008
The Times not ramping for a change
Harsh new conditions set by banks may leave many borrowers unable to get a mortgage, after the sudden demise of Bear Stearns fuelled concerns that the credit crunch will prove deeper and more enduring than was first thought. Even "prime" mortgage borrowers may be hit with higher interest rates in months to come as banks become increasingly jittery and attempt to shield themselves. Borrowers who have secured pre-approval for a mortgage are finding offers suddenly withdrawn. On a £150,000 Nationwide home loan, a borrower now needs a £37,500 deposit to get its most competitive rate of 5.68%. A month ago the same borrower would have required a deposit of only £15,000 (10%) to obtain the same rate.