Downturn points to cut in rates

casper_uk

http://www.timesonline.co.uk/tol/money/property_and_mortgages/article5089688.ece

Lenders are expected to raise tracker rates despite the predicted cut in the base rate tomorrow

Northern Rock, the Government-owned lender, has announced that it is pulling all its tracker deals for homeowners and landlords. It is expected to increase rates when it relaunches the mortgages later this week.

It follows a move by Abbey earlier today to increase interest rates on tracker deals by up to 0.5 percentage points. Tracker deals are pegged to the Bank of England base rate. The Spanish-owned bank has effectively reduced or cancelled out the Bank of England's expected rate cut tomorrow, designed to alleviate the pressure on over-burdoned homeowers.

Experts say that lenders are likely to continue to protect profits margins at the expense of homeowners.

Aaron Strutt, of Chase de Vere Mortgage Management, a broker, said: "All the big lenders are expected to change trackers in the next few days. The margins between new tracker rates and the base rate are going to continue to increase."

Not good news for anyone with a mortgage thinking lower interest rates = lower mortgages. Like i have said before things will not get better for a few years..

Realy

casper_uk wrote: »

http://www.timesonline.co.uk/tol/money/property_and_mortgages/article5089688.ece


Not good news for anyone with a mortgage thinking lower interest rates = lower mortgages. Like i have said before things will not get better for a few years..

It is the banks factoring rate drops for new mortgages they know the rates are going through the floor and BOE trackers are the only guaranteed rate drop for mortgage holders.

It is not current mortgages.:rolleyes:

neverdespairgirl

Realy wrote: »

China, tokyo all going in to recession, half of the toy companies in china have already gone bust down to the downturn.

It is a global market, one suffers we all suffer.

I don't think this is just down to recession. There have been a number of scandals recently about Chinese quality control and safety in relation to toys as well.

Realy

neverdespairgirl wrote: »

I don't think this is just down to recession. There have been a number of scandals recently about Chinese quality control and safety in relation to toys as well.

I think you are wrong there, China and the world presumed that china had de-coupled from the west last year. (Their economy could be held up by their own middle class's)

The current economic climate has proved that wrong.
How would you explain hong kong?

StevieJ

casper_uk wrote: »

http://www.timesonline.co.uk/tol/money/property_and_mortgages/article5089688.ece

Lenders are expected to raise tracker rates despite the predicted cut in the base rate tomorrow

Northern Rock, the Government-owned lender, has announced that it is pulling all its tracker deals for homeowners and landlords. It is expected to increase rates when it relaunches the mortgages later this week.

It follows a move by Abbey earlier today to increase interest rates on tracker deals by up to 0.5 percentage points. Tracker deals are pegged to the Bank of England base rate. The Spanish-owned bank has effectively reduced or cancelled out the Bank of England's expected rate cut tomorrow, designed to alleviate the pressure on over-burdoned homeowers.

Experts say that lenders are likely to continue to protect profits margins at the expense of homeowners.

Aaron Strutt, of Chase de Vere Mortgage Management, a broker, said: "All the big lenders are expected to change trackers in the next few days. The margins between new tracker rates and the base rate are going to continue to increase."

Not good news for anyone with a mortgage thinking lower interest rates = lower mortgages. Like i have said before things will not get better for a few years..

Just had a look at Abbey, BR + 1.69%, brilliant 2.69% mortgage coming to you very soon.

Realy

StevieJ wrote: »

Just had a look at Abbey, BR + 1.69%, brilliant 2.69% mortgage coming to you very soon.

:rotfl: :rotfl: :rotfl:
1.79 first direct.:rotfl: me 1.49.:rotfl:

Realy

neverdespairgirl wrote: »

I don't think this is just down to recession. There have been a number of scandals recently about Chinese quality control and safety in relation to toys as well.

Here is a article on it, I just pulled it off google, I have not read it but presume it is what I am on about.
http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_wasik&sid=adr0WRRON5uk

Now had a quick skim and it is and dated back to march.

StevieJ

Realy wrote: »

:rotfl: :rotfl: :rotfl:
1.79 first direct.:rotfl: me 1.49.:rotfl:

Am I being naive here? why wouldn't a FTB just take out a tracker mortgage? They are also offering nearly 4 times on joint incomes, seems OK to me. As soon as they have saved up those deposits the market will be flying again.

neverdespairgirl

StevieJ wrote: »

I think we have the highest rates in the developed world.

Iceland - 18%
Hungary - 11.5%
Australia - 6%
Denmark - 5.5%
Norway - 4.75%
South Korea - 4.25%

Generali

AIUI (and I spent 4-5 years working in Treasury markets) 3 month LIBOR is falling to reflect exepcted falling base rates. As the date of the fall in base rates approaches, we would expect to see LIBOR come down another couple of basis points as more of the 3 months of the money market contracts it is based on are at a lower expected rate (IYSWIM).

As far as I'm concerned, as long as LIBOR is more than say 50bps above the base rate the money markets are far from normal and they need to be.

PS Letters of credit seem to be causing the next big problem in the world economy. Shippers won't take on a cargo without a letter of credit as they don't know when they'll get paid. Apparently the cost of these has doubled in the past few months.