Saturday, June 28, 2008
IR going down? Will people return to reckless borrowing?
C&G is cutting the cost of its tracker mortgages by between 0.2% and 0.26% from Monday. The move will leave a two-year tracker deal for someone who has a 30% deposit at 5.99%– a full point better than the average rate, which broke through the 7 per cent barrier this week. A&L, which had withdrawn its most generous deals over the last few months, yesterday launched a new two-year tracker at base rate plus 0.98% – equating to 5.98% at today's rates. The deal is for any home owner with a 25% deposit and looking to borrow up to £1 million. Will we see the return to reckless borrowing or will banks now limit advances to 3 -5 times certified salary? Or will these products be withdrawn on Tuesday due to excessive demand?