What will happen to mortgage rates in next 6 months?

the.ciscokid

mpsavuk wrote: »

Thats the rate at which banks borrow money, not consumers!

It is the rate that a tracker mortgage uses, so it affects consumers who are looking at these mortgages (the OP mentions tracker in the first post).

Also, the Base Rate is only the rate that banks borrow from the BofE, not from each other - that is LIBOR.

dwsjarcmcd

If base rates don't increase then it will be difficult for SVR to increaase - but not impossible. I do, however, think fixed rates and trackers (i.e. the margin over base rate) could rise as lenders need to pay ever increasing savings rates to attract retail deposits to replace wholesale funding.

opinions4u

Top economist predicts interest rates could stay low for years linky.

Also, the Base Rate is only the rate that banks borrow from the BofE

The Bank of England will usually charge a high street bank an added rate over and above the base rate.

Also, the Base Rate is only the rate that banks borrow from the BofE, not from each other - that is LIBOR

Again, it will be LIBOR + an added rate based on the risk profile of the borrowing bank.

Swap rates are particularly relevant to the fixed market too. Again, these are base rates that will usually have a risk weighting added to them when funds are lent. Many banks are struggling to raise funds beyond a 12 month period because nobody will lend it to them.