Monday, March 14, 2011
The only way is up, baby.
*Looks like my '9 out of 10 borrowers gamble on it being different this time' comment last week wasn't too far off the mark* 'Second, recent history strongly suggests that current mortgage costs are abnormally low. According to the Building Societiesâ€™ Association, variable rates averaged 5.3pc in the decade after 2000; 8.9pc in the 1990s; 12.5pc in the 1980s and 10.1pc in the 1970s. Third, many householdâ€™s biggest monthly outgoing is their mortgage. So, before anyone decides to bet that rates will remain at or near their historically abnormal current low levels, they should ask themselves whether this is a gamble they can afford to lose. Have the nine in 10 homebuyers currently opting for fixed rates done so? I wouldnâ€™t bet on it.'