End of the cheap fixed mortgage

donaldtramp

http://www.timesonline.co.uk/tol/money/property_and_mortgages/article6492461.ece

Britain’s banks stand to reap a £900m windfall from the recovery as mortgages look set to rise for the first time in a year.
Brokers have warned that the average five-year fix could hit 6% within weeks, up from 5.6% at the start of last week and as little as 3.95% three months ago. Deals as low as 4.5% are still available but they are expected to disappear fast.
Lenders are blaming a sharp rise in the cost of funding mortgages in the money markets, where rates have risen as the City becomes more optimistic about a recovery.
However, research for The Sunday Times by Capital Economics, based on Bank of England data, has found the rises are as much to do with bank profits.
The average five-year fix of 4.92% in May was 1.84 percentage points above the cost of funding. A year ago, when the average five-year deal was 6.11%, the margin was just 0.87 — so lenders are pocketing an extra 0.97 points. They have boosted margins on two-year fixes by a similar amount over the past year.
Yet while mortgage rates are going up, savings rates are falling, as banks target other ways to boost their margins.

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Yup the good old banks eh? Screw us from every direction....

But it is interesting to note that our government taking on of massive, massive debt is not only going to affect our taxes. It's also going to cost us a fortune in mortgages as banks have to pay higher rates to borrow money, the banks then pass that increase onto us (plus a chunk of cash) shafting us in the process.

Good eh?

Lotus-eater

donaldtramp wrote: »

the banks then pass that increase onto us (plus a chunk of cash) shafting us in the process.

Good eh?

Banks are a business, I don't understand why you think a business shouldn't make money, it's what they do.

If you think you could run a mortgage lending business better than the banks, then you have seen a hole in the market, go for it. If you don't like the fees a bank charges, go somewhere else.

Although I do understand how banks have caused alot of this mess, I still don't understand the hatred of them and the people that work for them.

IveSeenTheLight

5-6% fixed for 5 years is cheap.
suggest people maybe should consider getting it while they are at that level.
My mortgages are due for renewal at the end of the year and I'm hoping to get a good long term fix then, even if the SVR is lower.

Actually, considering looking at how long the approval is valid for and sit on the SVR before taking up the approval if rates start to rise

bendix

Donald, donald, donald. I really expect better from you. I thought you were one of the financially savvy people on this forum.

Not only is the government, NOT taking on debt in this instance, but it is actually doing the opposite. It is becoming a lender to the banks and some of them are already paying those loans back to the Government (cf, Lloyds HBOS repayment last week).

Secondly, why rail like a frustrated Daily Mail reader about the banks making profit? What's wrong with profit? Instead of complain, join in the party and buy some bank shares.

Life is so simple, really.

StevieJ

bendix wrote: »

Donald, donald, donald. I really expect better from you. I thought you were one of the financially savvy people on this forum.

Not only is the government, NOT taking on debt in this instance, but it is actually doing the opposite. It is becoming a lender to the banks and some of them are already paying those loans back to the Government (cf, Lloyds HBOS repayment last week).

Secondly, why rail like a frustrated Daily Mail reader about the banks making profit? What's wrong with profit? Instead of complain, join in the party and buy some bank shares.

Life is so simple, really.

Which bank do you work for

JonnyBravo

Lotus-eater wrote: »

Banks are a business, I don't understand why you think a business shouldn't make money, it's what they do.

If you think you could run a mortgage lending business better than the banks, then you have seen a hole in the market, go for it. If you don't like the fees a bank charges, go somewhere else.

Although I do understand how banks have caused alot of this mess, I still don't understand the hatred of them and the people that work for them.

I'm a little flabbergasted by your lack of understanding.

These banks decreased their margins time after time as "the market" demanded it over the last decade. Each time heading towards unsustainability as the money went round and round in circles.
Now they get to act as a cartel (yes a cartel.... eg Nationwide increase their fix rates last week and before you know it they all agree to do it) and increase the margin without the grace to declare it as their need to repair their balance sheets.

Granted they are now back at sensible margins, but I'm not sure it's going to stop there is it? They will happily take all the money the Govt can throw at them and then make billions in profit. The chairman will get rich beyond an average Joe's wildest dreams and the MP's responsible for this will all get cushy executive jobs when we throw them out of office.

It stinks.

:mad:


(The only saving grace is the fact I've got my nose in the trough too and have made a nice penny off their shares the last few months.... if it is so obvious I might as well join in eh?)

:j



It's all a game eh?


:rotfl:

Harry_Powell

Someone was warning about fixed rates increasing when I first joined MSE, there was a thread about buying houses and securing low fixes before they went up. I've checked the history and the rate was a 5 year fix with A&L at 3.99 with no arrangement fee.

IIRC, the bloke posting it was savaged by quite a few people, so I disregarded the advice. I'm starting to wonder if I was correct to do so.

If rates go up to 6%, then had I gotten a £150,000 mortgage at 3.99 I would have saved myself £251.25 per month! or £3015 per year. The OP of that thread was also talking about mortgage rates hitting between 8% and 12%, I can't bring myself to do the calculations! :eek:

StevieJ

JonnyBravo wrote: »

(The only saving grace is the fact I've got my nose in the trough too and have made a nice penny off their shares the last few months.... if it is so obvious I might as well join in eh?)

And me :beer:

StevieJ

Harry_Powell wrote: »

Someone was warning about fixed rates increasing when I first joined MSE, there was a thread about buying houses and securing low fixes before they went up. I've checked the history and the rate was a 5 year fix with A&L at 3.99 with no arrangement fee.

IIRC, the bloke posting it was savaged by quite a few people, so I disregarded the advice. I'm starting to wonder if I was correct to do so.

You might not be DD but you certainly share a style

bendix

StevieJ wrote: »

Which bank do you work for

None. But I do have bank shares in my portfolio. As my bank fees etc contribute to their profits, I think it's only logical that I share in the benefits of those profits by buying shares and taking their dividends.

It's so much better than assuming the 'Mr Angry From Tunbridge Wells' stance which seems the preferred option on MSE.

JonnyBravo

Harry_Powell wrote: »

IIRC, the bloke posting it was savaged by quite a few people, so I disregarded the advice. I'm starting to wonder if I was correct to do so.

I'm surprised you can't remember his name.

:rolleyes: