LIBOR still dropping...

crispy2_2

Ray Boulger made another post a couple of days ago (14th July) that dissects a recent release by the Council of Mortgage Lenders, and proves interesting reading on why fixed mortgage rates are not closely tracking swap rates.

http://www.charcol.co.uk/knowledge-resources/ray-boulgers-blog/article/view/comment-on-the-cml-statement-on-fixed-rate-pricing/3567/

Here's a snippet:

Swap rates are commonly cited as "the cost to lenders of fixed rate funds", but the real picture is more complex. The recent decline in swap rates is not necessarily a clear indication that the cost of raising fixed term funding has fallen.

foreversummer

It was actually on the John Charcoal home page under the banner "To fix or not to fix" which of course has now changed. It was there for several weeks last month.

Foreversummer

dannykos

the apparent reason for the increase in margins between swaps and fixed rates is that the banks have been 'told' to do it - in order to be seen to have appropriate levels of funding available to them incase we have Recession 2.0

So - as far as I can tell, 'we' kept them in business through bailouts - and now we're all filling their once empty coffers again… nice.

inspector_monkfish

LIBORs 17th July

3mth 0.96025
6mth 1.18375
12mth 1.49625

all down 1pt

inspector_monkfish

LIBORs 20th July

3mth 0.94813 (down 1 1/4pts)
6mth 1.17188 (down 1pt)
12mth 1.49125 (down 1/2pt)

Charlton_King

Those poor banks. Doesn't your heart just go out to them? Should we not, perhaps, dole out some more largesse to them, out of sheer pity..?

Obviously, this is a scenario which screams out for 2 yr fix mortgages at a rate of 5% plus...

Alan_Cross

Charlton_King wrote: »

Those poor banks. Doesn't your heart just go out to them? Should we not, perhaps, dole out some more largesse to them, out of sheer pity..?

Obviously, this is a scenario which screams out for 2 yr fix mortgages at a rate of 5% plus...

Absolutely. Check out the historical trend. Rarely if ever this low.

http://www.wsjprimerate.us/libor/libor_rates_history.htm

inspector_monkfish

LIBORs 21st July

3mth 0.94125
6mth 1.16063
12mth 1.48188

all down another point.......

inspector_monkfish

LIBORs 22nd July

3mth 0.9375
6mth 1.15688
12mth 1.47688

down 1/2pt

inspector_monkfish

LIBORs 23rd July

3mth 0.93025
6mth 1.15025
12mth 1.47125

all down another 1/2pt