Fixed rate mortgages - have juicy deals gone for good?

biglugs

One of the problems facing the building society market at the minute is the amounts they are having to pay to the Financial Services Compensation Scheme. These are sizeable payments, to pay for the screw ups of other companies, which are limiting the deals they can offer.
And with low interest rates they are not seeing huge floods of investments coming from savers, so they simply don't have the cash to give us good mortgage deals any more.
And borrowing money on the markets to lend on to mortgage customers is a non-starter.
Unfortunately I expect good fixed rates to not be available for some time

Thrugelmir

biglugs wrote: »

And with low interest rates they are not seeing huge floods of investments coming from savers, so they simply don't have the cash to give us good mortgage deals any more.

There aren't enough savers to fund the borrowing requirement.

Local Building Societies around 30 years ago worked on the principle of needing around 100 savings accounts to fund 1 mortgage.

We are now in a position in this country where the ratio of savers to borrowers is nearer 7:1.

Part of the correction in the coming years will be learning to save. Which is alien to a whole section of the population.

nearlynew

Saving and producing needs to replace borrowing and consuming if we are to achieve a sustainable economy.


p.s. the whole banking industry is one big cartel.

SilverStandard

carolt wrote: »

I'd guess that fixed rates will continue to rise in the short/medium term, but once house prices have fallen to a level where banks no longer have to worry about losing theiir shirts if they offer favourable rates and attract lots of punters, rates will improve.

QUOTE]


I like the sound of this Carlot because I have been waiting to jump back in but prices havent fallen enough yet for me, but I was worried I may miss the low interest rates if I wait for prices to correct.

What your saying is the rates will be higher until house prices correct to where they should be?

Thrugelmir

SilverStandard wrote: »

carolt wrote: »

I'd guess that fixed rates will continue to rise in the short/medium term, but once house prices have fallen to a level where banks no longer have to worry about losing theiir shirts if they offer favourable rates and attract lots of punters, rates will improve.

QUOTE]


I like the sound of this Carlot because I have been waiting to jump back in but prices havent fallen enough yet for me, but I was worried I may miss the low interest rates if I wait for prices to correct.

What your saying is the rates will be higher until house prices correct to where they should be?

No point in waiting for cheap money. Its all been spent in the past 10 years.

Wait for house prices to stabilise. Too many uncertainies at the moment.

carolt

SilverStandard wrote: »

carolt wrote: »

I'd guess that fixed rates will continue to rise in the short/medium term, but once house prices have fallen to a level where banks no longer have to worry about losing theiir shirts if they offer favourable rates and attract lots of punters, rates will improve.

QUOTE]


I like the sound of this Carlot because I have been waiting to jump back in but prices havent fallen enough yet for me, but I was worried I may miss the low interest rates if I wait for prices to correct.

What your saying is the rates will be higher until house prices correct to where they should be?

Yes. But even if they don't, TBH I'd rather borrow less money at a higher rate than more money at a lower rate. Rates vary all the time, but the debt you've taken on has to be repaid and doesn't change.

I anticipate higher rates initially, causing further price falls as loads who are only surviving now due to ridiculously low rates have no choice but to sell, followed by lower rates once prices have gone as low as they're going to and the banks have stopped panicking.

HAMISH_MCTAVISH

carolt wrote: »

Yes. But even if they don't, TBH I'd rather borrow less money at a higher rate than more money at a lower rate. Rates vary all the time, but the debt you've taken on has to be repaid and doesn't change.

I anticipate higher rates initially, causing further price falls as loads who are only surviving now due to ridiculously low rates have no choice but to sell, followed by lower rates once prices have gone as low as they're going to and the banks have stopped panicking.

LOL!!!!!! Where do you bears get this nonsense from??????

The OP is right. There are only two scenarios. And both will happen.

1. The current small cartel of Banks will continue increasing margins for new purchases, further ensuring that post crash purchasers gain little over pre crash purchasers in true lifetime housing cost terms.

2. A few years down the line, margins will have reached such a lofty height that the vast pool of global liquidity looking for returns will breach the risk/return threshold, and will flood the UK mortgage market, driving competition and lowering margins. However this will then create rampant HPI and both prices and base rates will rise.

carolt

If this was true, house prices would have to fall by unprecedented amounts to meet the lack of mortgage demand.

Goody.

HAMISH_MCTAVISH

carolt wrote: »

If this was true, house prices would have to fall by unprecedented amounts to meet the lack of mortgage demand.

Goody.

:rotfl:

At least the bears on HPC could argue a semi-decent case.:rolleyes:

Care to elaborate?

There is no shortage of mortgage demand. There is a shortage of mortgage supply. But that shortage has eased with an increase in both the number of loans being lent, and the average amount per loan.

Prices have therefore risen every month since february.

Prices don't "need" to fall at all. Prices will settle wherever the supply of funding lets them. As the supply is rising, unless it falls again, prices will stabilise or rise.

carolt

I think if rates shot up and margins - according to you - shot up even higher, that there would be a significant drop in mortgage demand.

Time will tell.

Can't think why you got kicked off another website.

You seem such a nice guy.