Mortgages: 'Fixed rates could reach 6pc within weeks'

Thrugelmir

roseland69 wrote: »

Aren't tracker mortgages a bad thing if we get rates shooting up over 10%?

We have just sold and are going to rent. We had thought about buying but "the right" house has not come up. We are aware about the real risk of future rate rises. So what we save in prices dropping we lose (to an extent) in having to pay more per month repaying any loan we eventually do get.

Swings and roundabouts!

Historically SVR tracked BOE base rate , most lenders around 2%.

Only in more recent years when lenders broke ranks and offered variable rates under 2% above base. To compete for business did trackers become an everyday product.

Trackers in the future will be consigned to the annuals of history, as banks will return to a good margin above base for their minimum lending rates (SVR). Also why pay fees every few years to renew your mortage?

tara747

StevieJ wrote: »

Not true, the problem at the moment is deposits and actually securing a mortgage, higher SVR can easily be supported, providing liquidity returns and deposits reduced.

Er, what???????

Thrugelmir

StevieJ wrote: »

I am not talking about credit driven booms I am talking about the norm, I certainly can't remember a time when you needed a 25% deposit to buy a house (I do accept that MIG was paid previously for insurance).

Agreed, but was still a sizable cost that was added to the mortgage. In the current market who would offer such a product? I remember going through hoops to get my first mortage and 82% advance. The MIG was high and expensive though can't remeber the %. As had over 75% advance.

In a sense thats what mortage product fees are now. Every tranche of fixed term lending at £1,000 a mortgage, helps cover bad debts.