Bank Woes Ensure Interest Rate Will Stay Low

samba

ad9898 wrote: »

... the price of property got so distorted from reality ...

As with all things the price of property is determined by what people are willing to pay for it and what people are willing to sell for ( admittedly these factors are themselves based on such things as production costs and supply and demand, although these only affect the final price indirectly ).

Therefore, although the prices were high, they were not really divorced from reality as the reality at the time was people willing to pay high prices due to the availability of credit and high demand. That reality has changed now, along with property prices...

Gorgeous_George

If the mortgage interest rate rises from 4% to 8%, the repayment increases by 46% (based on a 25 year mortage of £100k).

If BofE is staying at 0.5% for at least another 12 months I expect this November to be the best time for a FTBer to enter th market. I think house prices will dip as Winter takes hold but I think the bottom will be this year - possibly just 10% lower than today's prices. If interest rates are expected to rise it seems likely that there will be a goldrush to secure a home and a cheap fixed rate mortgage ahead of UKIP winning the next election. :rotfl:

Seriously, if Labour win, interest rates will rise. If the tories win, interest rates will rocket into double figures. If anybody else wins, God help us.

GG

lemonjelly

inspector_monkfish wrote: »

LIBORs continue to fall

With LIBORs falling, surely the banks are profiteering?
Therefore where is the fairness in their actions?

sabretoothtigger

Abbey, the country’s second-largest mortgage lender, will relax the lending criteria on its most popular home loans, providing a significant boost to the mortgage market. The lender, which is owned by Santander, of Spain, is lowering the minimum deposit required for its best fixed-rate deals from 40 per cent to 30 per cent, making its most competitive deals available to tens of thousands more prospective homeowners, reports the Times.

Bargain ! ? 30% sounds dam high to me but I guess that depends how nice the rate is and turns out to be

System

Abbey also relaxed their criteria for remortgages recently it seems. In fact I'd go as far as to say they've been quite generous.

Thrugelmir

sabretoothtigger wrote: »

Bargain ! ? 30% sounds dam high to me but I guess that depends how nice the rate is and turns out to be

But are they actually lending more? House prices have dropped so people remortgaging haven't the same LTV. Very clever marketing spin.

inspector_monkfish

lemonjelly wrote: »

With LIBORs falling, surely the banks are profiteering?
Therefore where is the fairness in their actions?

exactly!
they are still having us all over!!

Thrugelmir

lemonjelly wrote: »

With LIBORs falling, surely the banks are profiteering?
Therefore where is the fairness in their actions?

Do you know what Libor is and how it is set?

From your comment I suspect not.

whathavewedone

Banks making a profit???? Dear god how outrageous!

inspector_monkfish

Thrugelmir wrote: »

Do you know what Libor is and how it is set?

From your comment I suspect not.

i may be wrong, but i think what lemonjelly is getting at, is...... if LIBORs are coming down, why aren't the Bank's mortgage rates ?

well thats what i think he is getting at anyway