Article(s) associated to this keyword
- Where Now For Mortgage Rates?
- Lloyds TSB in HBOS Takeover
- Best Buy Mortgages
- Banks Reluctant To Take On Risky Customers
- Bail-out Of US Banks Boosts Markets
- Mortgage Rates Cut
- Mortgage Competition Is On The Way Back
- Mini Mortgage Price War Breaks Out
- Fixed Rates Are Falling
- Fixed Mortgage Rates Down to 2007 Levels
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?
Following the weekend’s dramatic events in the US, the UK’s HBOS saw its share price dive. Lloyds TSB has stepped in to buy out HBOS. Meanwhile inter-bank lending rate Libor has jumped and fixed mortgages are bound to rise.
Last week many high-street lenders announced a reduction in mortgage rates, but buyers have since been warned that the cost of fees may increase significantly as a result.
Despite the good news coming from the US with the bail-out of two major mortgage banks, lenders in the UK are still reluctant to lend. Why are they so nervous? There are factors that suggest that the credit crunch has some way to run yet, before lending is freed up again.
The announcement by the US Government that it is to effectively nationalise Fannie Mae and Freddie Mac has boosted stock markets around the world. Asian markets and London’s FTSE 100 have all seen more than 3% rises so far.
A number of mortgage providers have, or are expected to, reduce the interest rates on the products they offer – a far more positive move than earlier in the year when costs were rising steadily.
As Alliance & Leicester cut many of its fixed rate mortgages this week, it really does seem like mortgage competition has been re-joined. A&L is owned by Banco Santander which also owns Abbey, and is pushing aggressively into the UK mortgage market.
It appears a mini price war has broken out between lenders - good news for consumers. There is even one rate below 5% for two years, but watch out for the fees.
Halifax led the way, and several other big-name lenders are following suit with cuts to their fixed rate mortgages. They can do this because the swap rate has come down over the last month. However, the best deals are still available to those with plenty of equity in their property or a large deposit.
Rates for fixed mortgages are down to very similar levels to August 2007, and well down from their peak in July. However, associated costs, such as fees, and the amount of deposit required remain high. Also, a year ago the base rate was 5.75% as opposed to 5% now.
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