Thursday, January 16, 2014

To help prevent a bubble ! My sides are splitting, stop it!

BoE considers return of 30-year fixed rate mortgage to fight housing bubble

Mark Carney, the Bank's Governor, said last November that the FPC would consider recommending a range of tools to prevent the housing market from overheating, including a cap on loan-to value (LTV) and loan-to-income (LTI) ratios.

Posted by happy mondays @ 10:19 AM (3369 views)
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7 thoughts on “To help prevent a bubble ! My sides are splitting, stop it!

  • Thirty year gilts are at 3.8 and thats with insurance and pension and boe mandatory purchases. Who will soak up thirty year mortgage issuance in the uk. I think nobody voluntarily.

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  • Thecountofnowhere says:

    Telegraph: BoE considers return of 30-year fixed rate mortgage to fight housing bubble

    Don’t they mean to support the housing bubble ?

    This is a disgrace.

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  • In 2009 many lenders were ringing round to get people to commit to 5 year fixed rate mortgages at a large mark up with big fees attached. At the time many of these lenders had been “tipped the wink” that Central Banks were planning to keep IRs low for 3 or 4 years.

    Trust me, I’m a Banker. 🙁

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  • “US-style mortgages, seen in the years following the Miles Review in 2004, allowed borrowers to lock-in the interest rate paid for the duration of their loan. However, when introduced in the UK, many had costly exit penalties that are not common in the US and have never taken off” – This pretty much tells its own story – my experience of financial services spans 4 decades (old git that I am) and I’ve never ever seen such a scheme be genuinely available in the UK. More evidence that the people in the high chair have no idea what they are talking about or alternatively just spout hot air in the belief that the majority do not understand it anyway !

    Another howler is the recent claim from the pension minister that people should be able to shop around every couple of years for the best annuity rate having drawn their pension ! – boy does he know the mechanics of how a pension is vested

    http://www.moneymarketing.co.uk/news-and-analysis/pensions/steve-webbs-switchable-annuity-plans-could-see-25-rate-cut/2004847.article

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  • Yes please, where do I sign up.

    Seriously, this is the only thing that would encourage me to buy in the UK. houses may be overpriced, but if they are overpriced at a fixed low rate (4 to 5% for < 75% LTV) then it would be good for me. If you were paying half the price for the house at double the rate then it costs 'about' the same anyway. One more thing, what's it got to do with BOE anyway, surely the 'market' (if there is such a thing in housing) should be offering these loans. For comedy value: "Policymakers said home owners faced a "real risk of falling house prices" in the coming years, which could be removed by "locking in" house prices." Seriously, though it's not just the property prices that are out of control it's rents and government borrowing.

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  • Why not start with good 8 and 10 year fixed rates first? Then consider 15, 20 and 25yrs.
    But the mortgages must allow people to move house.

    Nobody should take 30 yrs on a mortgage, that will simply inflate prices, making houses less affordable.

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  • Not sure if anyone is aware, Canada is in a houseprice boom, where did carney come from? what job did he do before he came here?

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