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- Libor Stays High as Base Rate Cuts are Forecast
- Mortgage Lenders Slow to Respond Positively
- Libor Unmoved by Government Rescue Package
- Welcome Rate Cuts for Mortgage-Owners
- Bank Cuts Interest Rate a Day Early in Co-ordinated Move
- Hopes Rise for a Rate Cut
- Fixed Rates Rise Again
- Rates Up For Those With Small Deposit
- Mortgage Approvals Down Again
- Where Now For Mortgage Rates?
Although the three-month Libor rate is remaining frustratingly high, there are expectations for the base rate to be cut again this year and throughout 2009, as forecasts are for inflation to come down, maybe as low as 1% in 12 months time.
Some mortgage lenders have reacted to the Bank of England rate cut or the Government rescue package by raising tracker rates or by increasing their demands for deposits. It is hardly the response the Government would have hoped for.
It is going to take time for the Government’s financial rescue package to have an effect on the markets. That much was evident after the FTSE continued to fall and Libor rate did not follow the base rate down.
The Bank of England unexpectedly cut its base rate by 0.5% yesterday, bringing financial relief to thousands of homeowners as monthly mortgage repayments will now fall.
Following the Government’s £50bn rescue plan for banks on Wednesday morning, the Bank of England cut the base rate by 0.5%, announcing the move a day early. The US Federal Reserve, the European Central Bank and other European central banks made similar moves. The Stock Market responded favourably.
With fears for a recession now overtaking fears for inflation, expectations are rising in the City for a Bank of England base rate cut this week. Inflation is expected to peak soon, but the economy is in dire need of a boost. A rate cut should help variable mortgage rates.
Nationwide has raised its fixed mortgage rates as other lenders have done so in the wake of recent financial turmoil. Borrowing has become tougher, especially if you don’t have a large deposit.
Following continuing uncertainty on the money markets, HSBC has raised its mortgage rates for those with less than 25% deposit. B&B has announced redundancies and the PM travels to the US for financial discussions.
Mortgage approvals were at their lowest level in August since records began. A number of factors are keeping people out of the housing market, not least concerns over the economy and jobs. The hope is that the Bank rate will come down soon.
With turmoil on the stock market and HBOS being taken over by Lloyds TSB; with Libor rates rising, but the bank rate forecast to come down; with a proposed bail-out of sub-prime debts in the US: where will mortgage rate go next?
