LIBOR still dropping...

RomansProperties

Welcome Back

ChuiMartinez

the swaps are a better indicator of where the mortgage rates are going. and by that graph it only looks like its up! banks will no longer make the same mistakes of funding predominantly via the short term markets like northern rock did...we all know what happened there.

therefore reporting libor, as i've mentioned before, is just one way of looking at the picture. banks will be funding with longer term money such as swaps now therefore when quizzed as to why mortgage rates aren't falling this is likely to be there answer!

inspector_monkfish

LIBORs 25th August

3mth 0.70 (1pt lower)
6mth 0.9275 (1/2pt lower)
12mth 1.24375 (1/2pt lower)

inspector_monkfish

ChuiMartinez wrote: »

the swaps are a better indicator of where the mortgage rates are going. and by that graph it only looks like its up! banks will no longer make the same mistakes of funding predominantly via the short term markets like northern rock did...we all know what happened there.

therefore reporting libor, as i've mentioned before, is just one way of looking at the picture. banks will be funding with longer term money such as swaps now therefore when quizzed as to why mortgage rates aren't falling this is likely to be there answer!

thank-you, i think most people are aware of this

BaldySmurf

ChuiMartinez wrote: »

the swaps are a better indicator of where the mortgage rates are going. and by that graph it only looks like its up!

I regularly check the swap charts at:

http://www.swap-rates.com/UKSwap.html

and from the observations I've made rates are (currently) very steady, if not dropping a tad every so often.

Which graph are you using to show swaps rising as I'd like to follow it too - as someone about to come off a fix and move onto a SVR I'm closely following all sources available.

Jacka87

http://www.swap-rates.com/UKSwap_extended.html

from the same site as BaldySmurf but a slightly better graph for showing a trend. The Swap rates in my opinion where rising for about 6months until they peaked and they have now been falling gradually for the last 3months or so. Not by much tho!

Also on bbc news it was talking about mortgage companies not passing on the falls in swap rates to the customers so that might negate the falls. It seems that mortgage providers have now decided that they will follow swap rates up but not down!

I have said it before but the banks are taking the mick as they used to use BOE base rate, then when that didnt suit it was libor, then swap rates and now it seems they are going to something new as there excuse, I am thinking savings rates! Tho funny how when swap rates rose this year they put fixes up. mmmm....

RomansProperties

I appreciate knowing the LIBOR as about 5 of my mortgages are on libor linked deals at the moment and more to come.

michaels

But isn't there the chance to undercut in a competitive market if funds are available much more cheaply for say 3-12 months for variable rate products - after all if it is pitched as a variable rate to the customer if it is not possible to roll over the financing at such a cheap rate you can always increase the rate the customer pays?

ChuiMartinez wrote: »

the swaps are a better indicator of where the mortgage rates are going. and by that graph it only looks like its up! banks will no longer make the same mistakes of funding predominantly via the short term markets like northern rock did...we all know what happened there.

therefore reporting libor, as i've mentioned before, is just one way of looking at the picture. banks will be funding with longer term money such as swaps now therefore when quizzed as to why mortgage rates aren't falling this is likely to be there answer!

opinions4u

michaels wrote: »

But isn't there the chance to undercut in a competitive market if funds are available much more cheaply for say 3-12 months for variable rate products

It's not a competitive market. There is a severe shortage of funds and no appetite for risk.

after all if it is pitched as a variable rate to the customer if it is not possible to roll over the financing at such a cheap rate you can always increase the rate the customer pays?

The theory is fine. The reality is that many of the banks and other mortgage lenders can't raise finance beyond 12 months at all. If the wholesale funders pulled the short term funds as well, what you propose is a recipe for a bank becoming insolvent and collapsing.

inspector_monkfish

LIBORs 26th August

3mth 0.69350
6mth 0.92125
12mth 1.23875

guess what.... all between 1/2pt and 1pt lower...