Any prospect of rates coming down? WHAT is going on?

opinions4u

Charlton_King wrote: »

So kindly explain to me why the lenders were themselves saying, only 6 months ago or so, that their rates were a reflection of LIBOR and not the BoE base rate (when there was a clamour about them not following BoE down).

LIBOR rates / swap rates have different prices for different terms. Oddly, a bit like fixed rate and tracker rate mortgages provided by the lenders! Longer term LIBOR rates are higher than a year ago. Short term ones are lower.

Let's face it, they just pick the nearest convenient fig leaf available at any given time to cover an ongoing naked greed. They are leopards who are not even trying to change their spots.

No, there is a realistic pricing based on:

1) How much it costs to raise the money
2) Administration and maintenance costs of providing mortgage finance
3) Risk of borrowers defaulting
4) The reasonable need to turn a profit from what they do

I would guess their mortgage books are currently significantly less profitable than they were for most of the rest of the current decade.

cbrpaul

As i said a few motnhs ago, i cant see rates lowering atall , only rising !!
Libor rates , swap rates , blah blah , banks are there to make money nothing else, they are merely a cog in a required money making machine to make the world go around !!!

that 3.99% fixed for 5 years and no fees a couple of months ago , is looking to be the best ever deal that ever was , , as every week goes by !!!!

michaels

There are only 25%(?) mortgage products available now than 2 years ago - not surprising that banks have increased their margins - imagine if the other 3 big supermarket chains closed down how much tesco would be charging for everything...

At the moments the banks can hide the profits they are making on new mortgage business with the loans they are making on historic mortgages and other loss making lending. They can get funds very cheaply for svr lending and for borrowers with 40% plus equity the risk of losses on default remains negligible. If they stop making write-offs then the scale of their gouging of savers and borrowers will become clear.

Jacka87

I am not against compamies making a profit, my family have always been self employed so that would make no sense from my point of view. Also as a taxpayer the fact that the government owns large amounts of certain banks, it would be good that they earn my hard earned taxes back.

However the government dont own all of the banks and dont seem to be doing anything to get the public value for money from the other banks? On top of that what would be wrong with the government taking a longer period of time to earn the money back? It may just allow the economy to start to grow better if the banks where giving better deals on mortgages etc.

The savers arguement is a good point however since the majority of people in the uk are borrowers not savers that means that its there needs that should be prioritised when trying to help the economy.

Finally the thing that really annoys me about the banks making this much profit is this. They used to record rediculous profits and never packed anyaway. When they had a bad yea suddenly they need bailed out and the whole economy is in a dreadful state! Now they have went back to there old ways of making loads of money and ontop of that they are going to pay the government off as early as possible so that they can keep the profits for themselves! I would think the government should wait until the banks are wanting to pay the money back and then hold onto there shares for a little while so the taxpayer can make some profits for once!

Charlton_King

My point stands.

The lenders pointed to headline swap rates when it pleased them to do so.

Now, they are spluttering through their champagne, trying to divert our/govt. attention in any direction BUT libor in an attempt to maintain artificially high cash inflows.

This is a sleazy, purely self-interested game operating at the individual level. The bank executive cadre are running scared of possible government intervention in their cosy remuneration/bonus culture and want HMG off their backs as soon as possible.

Make no mistake - your latest, inflated rate mortgage offer has far less to do with the idea of potential risk to the corporate lender than it has to do with the idea of potential risk to its higher executives' wallets.

dunstonh

As has been said a few times on this thread already. Short term financing rates are lower than before. Long term financing rates are higher than before. Mortgages are long term.

Why not tell us how you think they should be able to buck that trend instead of just posting like a Daily Mail headline?

Jacka87

Well not that I want to answer the challenge to Charlton King to come up with a solution, however I do have to say that it seems like "we" the public are getting a raw deal whilst the Banks are getting it great.

They earn lots of money and pay themselves huge bonuses when times are good. When times are bad they suddenly get bailed out by us "the taxpayer". They are now all looking to get out of government control as soon as possible by ripping "us" off with long term mortgage rates (I know that rates are linked to swap rates and they rose so fixed rates rose, however there is a nice premium in there for the banks). Once they have done this the government will get paid back (good news I suppose) however at that point the banks will then start making loads of money and pay uge bonuses agian. Back to square 1!!!

think the government should be considering holding a little more power of the banks for a little longer. They should reduce the premium on mortgages to allow the public to be able to afford there mortgages and get the economy moving a little again. Basically just slow down the recovery rate for the banks and take a little longer to get the tax payers money back. This however should benifit the economy more. They however should also hold onto the banks long enough for the government not only to get the taxpayers money back but to also take a little profit to boost the governments coffers to avoid the government having spending cuts for a decade or more!

Charlton_King

For sure. There is a lot of naivety on this thread.

You would have thought by now that people might just have had their eyes opened to the mindset of higher echelon banking in this country but apparently not.

Said mindset can be summed up in two phrases:

1. Short termism and personal profit.

2. Short termism and personal profit.

Oh yes, I forgot the most important one:

3. Personal profit and short termism.


Sorry to labour what might be thought by any dispassionate, outside observer to be the classic, fawltyesque 'bleeding obvious' but it would appear that some have snuggled up so close to the trees that they can't see the woods...

ILW

Charlton_King wrote: »

My point stands.

The lenders pointed to headline swap rates when it pleased them to do so.

Now, they are spluttering through their champagne, trying to divert our/govt. attention in any direction BUT libor in an attempt to maintain artificially high cash inflows.

This is a sleazy, purely self-interested game operating at the individual level. The bank executive cadre are running scared of possible government intervention in their cosy remuneration/bonus culture and want HMG off their backs as soon as possible.

Make no mistake - your latest, inflated rate mortgage offer has far less to do with the idea of potential risk to the corporate lender than it has to do with the idea of potential risk to its higher executives' wallets.

If you dont like it, dont be a part of it.
Rent or try to raise funds in another country.
Just stop bloody moaning!
If you are that keen on shadowing base rates, why did you not take out a tracker.
Mate of mine has 0.25 over BoE for life. A very happy man.

Alan_Cross

I'm sorry but I'm with the OP on this one.

I'm totally amazed - especially on a moneysaving website - that the lenders have so many apologists and cheerleaders in their rip-off tactics.

For your information, ILW, being in a democracy means that we have the right to 'moan' and ask tough questions of the powers that be. The OP's point was not about 'shadowing base rate' but the LIBOR, which the lenders themselves made such a song and dance about when it suited them.

I'll bet you're happy to be on that tracker - but rather than any kind of borrower you sound like the CML front man.