Wake up Bears its feeding time

Harry_Powell

Thrugelmir wrote: »

1% above base? Days are over for these rates.

At 5%. Expect a spread nearer 7% to 9% for the majority of lending. With even good rates including product fees nearer 2.5% above base.

As you say though. Make paying down debt a priority as the longer term savings will be considerable.

Possibly, but I still maintain that if the BoE increased rates (over time) to 4.5%, not all of the increase will be passed onto the customer, creating 10% IR for people who are currently on 5.5% rates.

Really2

Graham_Devon wrote: »

What happens to the people who are "would be repo's"?

Do they ever have to pay back their missed payments? Or does it get written off? Does it get added to the mortgage?

So say they miss a payment of £600 this month, does £600 get added to their mortgage? I'm not sure that's actually possible for the banks to do that?

They have to make up the capital payments not interest I believe (as that is paid buy housing benefit).

If that is what you are on about.

Thrugelmir

Harry_Powell wrote: »

Possibly, but I still maintain that if the BoE increased rates (over time) to 4.5%, not all of the increase will be passed onto the customer, creating 10% IR for people who are currently on 5.5% rates.

Bank of China offering a lifetime tracker of 2.5% above base with a £1k product fee. As a new lender in the market a good indication of the what the major lenders will be offering in the future.

BOC's BTL rate is 3.5% lifetime tracker with a £1.5k fee. The days of easy money are over for some.

chucky

Thrugelmir wrote: »

1% above base? Days are over for these rates.

At 5%. Expect a spread nearer 7% to 9% for the majority of lending. With even good rates including product fees nearer 2.5% above base.

As you say though. Make paying down debt a priority as the longer term savings will be considerable.

you've taken the extreme worst case scenario.

i can see 2%-3% margins but not anything near the 4% above

i doubt if mortgage rates will go over 8% in the next 5 years

Thrugelmir

chucky wrote: »

you've taken the extreme worst case scenario.

i can see 2%-3% margins but not anything near the 4% above

i doubt if mortgage rates will go over 8% in the next 5 years

Not worst case. A high risk borrower wanting say a 90% LTV loan will be able to get one but at a price that reflects the risk.

Taking fees into account, there are products offering base plus 2% at the moment.

As capital balances reduce the fees make a greater % difference to the actual cost of borrowing money.

As for rates over 8%. A number of lenders already charge over 6% so a couple of points higher isn't unrealistic.

chucky

Thrugelmir wrote: »

Not worst case. A high risk borrower wanting say a 90% LTV loan will be able to get one but at a price that reflects the risk.

Taking fees into account, there are products offering base plus 2% at the moment.

As capital balances reduce the fees make a greater % difference to the actual cost of borrowing money.

As for rates over 8%. A number of lenders already charge over 6% so a couple of points higher isn't unrealistic.

of course they would - a high risk borrower at 90% would have had to have paid between 6%-7% in 2007, a price that reflected the risk at the time.

today they will need to pay close 9%, when lending loosens further this will drop.

nearlynew

But this time next year, house prices will be lower than they are now.

Dan:_4

nearlynew wrote: »

But this time next year, house prices will be lower than they are now.

You said this in August, so your statement should now read "But in 9 months, house prices will be lower than they are now"

Dan:_4

nearlynew wrote: »

But this time next year, house prices will be lower than they are now.

and this time next year im gonna be a millionaire, rodney.

JonnyBravo

Dan: wrote: »

You said this in August, so your statement should now read "But in 9 months, house prices will be lower than they are now"

A quick search shows he said it in June.

Oh and he gauranteed (sic) it to be 100% correct. You're going to look very silly Dan. :rolleyes:

nearlynew wrote: »

I don't care how anyone responds to this post or what economist they quote, I can confidently predict that average house prices will be lower this time next year.

100% correct and gauranteed.

HTH.