Mortgage rates to stay high for 9 years

ad9898_3

No housing recovery anytime soon then, although I guess a lot of people would say it is recovering now...... back to normality. Good news for FTB's, keep saving, the boat that some people say FTB's were 'going to miss', seems to have been sunk before it's even appeared on the horizon.;)

Borrowers have been warned they face higher mortgage rates for up to nine years as banks hit customers with the cost of tighter regulation.
Lord Turner, chairman of the Financial Services Authority (FSA), said in his report last week that lenders will be forced to hold more capital in future to prevent another banking crisis. Research published alongside the report made it clear consumers will bear the cost through higher rates on their home loans.
The news will come as a blow to millions of borrowers hoping that better deals would come on to the market, particularly from taxpayer-backed lenders such as Royal Bank of Scotland and Lloyds TSB.
The research, from the National Institute of Economic and Social Research, found that “scarring” from the financial crises will lead to higher borrowing rates for up to nine years.

http://www.timesonline.co.uk/tol/money/property_and_mortgages/article5949689.ece

pickles110564

ad9898 wrote: »

No housing recovery anytime soon then, although I guess a lot of people would say it is recovering now...... back to normality. Good news for FTB's, keep saving, the boat that some say people FTB's were 'going to miss', seems to have been sunk before it's even appeared on the horizon.;)




http://www.timesonline.co.uk/tol/money/property_and_mortgages/article5949689.ece

Ad9898 when do you think these lenders will start charging these higher rates please.

ad9898_3

pickles110564 wrote: »

Ad9898 when do you think these lenders will start charging these higher rates please.

They are being charged now, if you are an FTB without a hefty chunk of money for a deposit. No FTB, no housing market. Of course for people who already own and don't want/need to move and have good amount of equity, they are fine, mortgages for these people are pretty cheap, for now.

ad44downey

ad9898 wrote: »

No housing recovery anytime soon then, although I guess a lot of people would say it is recovering now...... back to normality. Good news for FTB's, keep saving, the boat that some say people FTB's were 'going to miss', seems to have been sunk before it's even appeared on the horizon.;)




http://www.timesonline.co.uk/tol/money/property_and_mortgages/article5949689.ece

This has got to be good news . And discourage people getting into mountains of debt.

leveller2911

I'm a FTB , have a 20% deposit and decided to go online and get an idea of mortgage rates from online calculators.
I would think they are only a guide but most rates for a 25yr mortgage,repayment,fixed for 3 or 5 yrs I was shocked at the rates......5.85%.................. :rolleyes: .

So I deduct from that rates are going up for FTB,s and will rise for all when fixed rates end..Form what Ive seen ad9898 is just about spot on.

Forgot to mention my credit score is 985

Dan:_4

leveller2911 wrote: »

I'm a FTB , have a 20% deposit and decided to go online and get an idea of mortgage rates from online calculators.
I would think they are only a guide but most rates for a 25yr mortgage,repayment,fixed for 3 or 5 yrs I was shocked at the rates......5.85%.................. :rolleyes: .

So I deduct from that rates are going up for FTB,s and will rise for all when fixed rates end..Form what Ive seen ad9898 is just about spot on.

Forgot to mention my credit score is 985

How did you come to the conclusion that rates would be going up? Anyway, 5.85% sounds pretty good, so are you sure it's wise to hold out in case they do increase?

Your credit score is meaningless, lenders will not look at this and each lender will have their own set of criteria your need to meet.

leveller2911

Dan: wrote: »

How did you come to the conclusion that rates would be going up? Anyway, 5.85% sounds pretty good, so are you sure it's wise to hold out in case they do increase?

Your credit score is meaningless, lenders will not look at this and each lender will have their own set of criteria your need to meet.

"credit score is meaningless"(would have highlighted your text Dan, but not sure how to.:D ) why have 3 banks looked at my credit file in the last 6 weeks?,(Halifax,Nationwide and HSBC) I haven't applied for any loans or any type of finance.
I think 5.85 isn't that great considering a 20% deposit and also given that friends who are in debt(secured and unsecured) end of their fixed rates are getting 3.85% with little equity in the property. Wish I knew what the banks criteria was....

If 5.85% is ok then when rates do go up (which I believe will be soon) a lot of people I know are gonna be sweating a bit

Dan:_4

leveller2911 wrote: »

"credit score is meaningless"(would have highlighted your text Dan, but not sure how to.:D ) why have 3 banks looked at my credit file in the last 6 weeks?,(Halifax,Nationwide and HSBC) I haven't applied for any loans or any type of finance.

I have no idea, do you have any dealings with those banks?

The actual score is meaningless because lenders do not see this when they credit score you. The main thing to ensure is you have handled previous credit commitments okay and your on the electoral roll.

leveller2911 wrote: »

I think 5.85 isn't that great considering a 20% deposit and also given that friends who are in debt(secured and unsecured) end of their fixed rates are getting 3.85% with little equity in the property. Wish I knew what the banks criteria was....

If 5.85% is ok then when rates do go up (which I believe will be soon) a lot of people I know are gonna be sweating a bit

Well, i guess it's up to you what you want to pay but I would find 5.85% a good deal, even with a 20% depoist.

It's great news for people ending fixed rates at the moment as SVRs are likley to be a lot cheaper, but if they don't have much equity then they may come unstuck when rates rise as they might not be in a position to remortgage. I hope they are saving the difference?

JonnyBravo

Well, many of the people who have been warning of this crash for so many years were always warning buyers to think about what their repayments would be at 12% so no doubt they've taken account of it and planned for the "high" rates we're seeing at the moment???

High rates? Don't make me laugh.

Degenerate

JonnyBravo wrote: »

High rates? Don't make me laugh.

Exactly. The banking problem have meant that not all of the base rate cuts have been passed on, but actual mortgage rates are still low by historical standards.

Tirian

JonnyBravo wrote: »

Well, many of the people who have been warning of this crash for so many years were always warning buyers to think about what their repayments would be at 12% so no doubt they've taken account of it and planned for the "high" rates we're seeing at the moment???

High rates? Don't make me laugh.

If it weren't for the billions being pumped into the financial system by various governments, 12% would probably be a good rate right now. And may yet be.

Am quite bemused by all the people wringing their hands over the fact that the bank is offering them 5.8% mortgage rate, as if this were a really bad deal. Check back on mortgage rates for the last 60 years or so - you've got it better than it's been for a few generations, and you're still whining??

Better get a few things into your head now :

- the rates of the last few years were not the norm.
- The Bank of England base rate ceased being the yard-stick for mortgage rates when the banks stopped basing their mortgage lending on the savers' deposits that they held
- as surely as rates are low now, they will be going up in the future (and the not too distant future at that), so perhaps your main concern should be to ensure that you will still be able to pay if rates are higher, rather than whining about not being able offered the rate that someone told you that their neighbour's mate's cousin might be getting.
- if the bank will offer you a mortgage at all, then count yourself lucky at the moment. There's plenty of people out there with savings, no debts or bad credit history, and with reasonable salaries who can't get a mortgage at all.