Saturday, June 7, 2008
Banks compete to offer “worst buy” mortgages
The mortgage market has been turned on its head. Banks and building societies used to compete on price, vying to offer the lowest rates and most reasonable arrangement fees. The aim, after all, was to attract borrowers through their doors. But the credit crunch has prompted a complete volte-face. Instead of competing to offer the lowest rates, lenders are now competing to offer the least attractive deals, terrified that if they are left exposed as the “best-buy” on the market they will be inundated with mortgage applications.