Thursday, June 11, 2009
Some Weedkiller for those “Shoots”
Nationwide Imposes Sharp Rise in Fixed Mortgage Rates
Nationwide Building Society is to raise interest rates on fixed-rate mortgages by as much as 0.86 percentage points, as rising wholesale costs put pressure on its rivals to follow suit. "The high street lender is increasing rates on all its fixed-rate mortgage deals from Friday. The rise would add £6,450 to the cost of a £150,000 loan over five years".
Posted by alan @ 06:35 PM (749 views)
2 thoughts on “Some Weedkiller for those “Shoots””
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drewster says:
No comments?
“In the wake of Nationwide’s move, mortgage brokers warned other lenders would follow suit because swap rates on the wholesale market – where banks and building societies raise much of their funding – have increased sharply in recent days. The two-year swap rate, for example, has gone from 1.97% on June 1 to 2.44% a week later on June 8.”
This is pretty big news. Why have rates jumped 0.5pc in just one week? The US mortgage market has seen a similar jump in the past couple of weeks. Is there renewed stress on the global financial system? There have been absolutely no major news events this week. Things are quiet – too quiet. This is the calm before the storm….
inbreda says:
I’m no expert but suspect that rates have jumped as the markets start reacting to all the money creation. Gilt prices have fallen, causing the yield to increase. It’s all part of the inevitable unravelling as talked about on HPC for a long time. The trouble is that, as you say, this could be very big news. It may be no more than a blip, but it could be the start of the rush to the exit. short term gilts could plummet in value, government auctions could fail, and we could be knocking on the IMF door within a few weeks.
THAT would mean double digit interest rates overnight.