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- Borrowing Still Tough as Deposits Go Up
- Mortgage Lenders Slow to Respond Positively
- Libor Unmoved by Government Rescue Package
- Bank Cuts Interest Rate a Day Early in Co-ordinated Move
- Hopes Rise for a Rate Cut
- Fixed Rates Rise Again
- Increase in Tracker Mortgages in Wake of Credit Crunch
- Rates Up For Those With Small Deposit
- Not Everyone is Raising Mortgage Rates
- Where Now For Mortgage Rates?
As Nationwide announced requirements for higher deposits, and reduced borrowing limits, the cheapest tracker rate on the market comes from First Direct.
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.
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 the collapse of Bradford and Bingley, other lenders have now removed their deals from the market - over 11% of mortgages were pulled.
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.
Northern Rock is cutting mortgage rates when others are raising theirs, leading to suspicions of it using taxpayers’ money to boost its market share. Brokers have seen an increase in enquiries for Northern Rock products since its nationalisation.
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?
