Lenders prepare to hike mortgages rates

silvercar

michaels wrote: »

Imteresting to see commercial reality making it a very unfair world - those with good credit histories and decent equity can get a new mortgage at 199 basis points over base, those without may well get stuck on an svr at 500 basis points+ over base. Somehow seems against the spirit of fair contracts but such is life.

Hasn't it always been this way? Those that are a higher risk pay more.

HAMISH_MCTAVISH

silvercar wrote: »

Won't effect those on lifetime trackers or those on fixed rates. Maily effects FTBs and those trying to grab a new mortgage deal.

Correct. Those on existing deals, including SVR's, will only be impacted by base rate changes, not margin changes. So reposessions and forced sales will be unchanged by this articles content.

Also worth noting that the SVR's for hundreds of thousands, perhaps even a million or more, borrowers on previous Nationwide or Lloyds mortgages is capped at BOEBR + 2%..... WHich is the same as the best tracker deals available today.

And many other lenders are only slightly higher.

Sad really for the buyers today, that their mortgage deals are so lousy by comparison. Totally wipes out any gain from cheaper prices in most cases.

Rinoa

stueyhants wrote: »

http://www.thisismoney.co.uk/mortgages-and-homes/article.html?in_article_id=496760&in_page_id=8&ct=5

Tens of thousands of homeowners face higher mortgage bills in the New Year as a result of lenders pushing up interest rates.tion this year.'

Tens of thousands? Is that all?

I've never heard of half the lenders mentioned in the artcle. They probably account for less than 1% of the mortgage market.

Usual nonesense from 'This is Money' :rotfl:

stueyhants

If the banks are forced to keep a large number of people on base rate trackers at a loss what do you think it's going to do to rates for new borrowers ? Surely the banks are going to have to recoup the losses from the new borrowers.

Its all well and good having a low mortgage rate for some but if the number of people who can afford to pay the higher rates diminishes what happens to the house market? Do we just get a situation where sales volumes start to shrink and we are left with a zombie market. Sellers unwilling to sell and new buyers not affording to buy??

stueyhants

Rinoa wrote: »

Tens of thousands? Is that all?

I've never heard of half the lenders mentioned in the artcle. They probably account for less than 1% of the mortgage market.

Usual nonesense from 'This is Money' :rotfl:

You could be right and this is just a one off. However it could be part of a trend upwards. The Gilts market is showing upwards movement so I wouldn't be to confident saying it was a one off.

Anyway, I thought with all the competition in the mortgage market margins would be decreasing and rates would be coming down rather than being static and in some cases going up

Rinoa

stueyhants wrote: »

You could be right and this is just a one off. However it could be part of a trend upwards. The Gilts market is showing upwards movement so I wouldn't be to confident saying it was a one off.

Anyway, I thought with all the competition in the mortgage market margins would be decreasing and rates would be coming down rather than being static and in some cases going up

A number of the very small mutuals are struggling, hence the SVR increases.

However, I think they are scaremongering when suggesting this will herald a sharp increase in SVR's from the main lenders.

Mortgage rates will be lower than historical levels for many years to come.

stueyhants

Rinoa wrote: »

A number of the very small mutuals are struggling, hence the SVR increases.

However, I think they are scaremongering when suggesting this will herald a sharp increase in SVR's from the main lenders.

Mortgage rates will be lower than historical levels for many years to come.

But debt is also higher than historical levels so IR will not need to rise as much as in the past for it to be an issue this time arround.

Slashing the base rate has stopped a mass of repossessions. BoE rates may stop low for a long time helping existing borrowers but rates for new borrowers, the lifeblood of the market are starting to creep up.

Rinoa

stueyhants wrote: »

But debt is also higher than historical levels so IR will not need to rise as much as in the past for it to be an issue this time arround.

Slashing the base rate has stopped a mass of repossessions. BoE rates may stop low for a long time helping existing borrowers but rates for new borrowers, the lifeblood of the market are starting to creep up.

If anything, rates for new borrowers are decreasing, or rather the attractive rates once reserved for those with a 30/40% deposit are now available for those with 20/25%.

Gilt yields suggest a BoE base rate of around 3.5% in 2015. That's not going to stop new borrowers entering the market.

Bootski

stueyhants wrote: »

http://www.thisismoney.co.uk/mortgages-and-homes/article.html?in_article_id=496760&in_page_id=8&ct=5

Tens of thousands of homeowners face higher mortgage bills in the New Year as a result of lenders pushing up interest rates.tion this year.'




Not a good start to the year for mortgages.

Well they won't go any lower. Base rate is 0.5 Mortgages for on average 5%. With this they already made a lot of money and paid off their debts to the taxpayer who bailed them out..

It's true... Lloyds told me so themselves. So now they're back concentrating on profit margins and everythings OK .... Hence Higher bonuses for everyone all round:T

carolt

Rinoa wrote: »

If anything, rates for new borrowers are decreasing, or rather the attractive rates once reserved for those with a 30/40% deposit are now available for those with 20/25%.

Gilt yields suggest a BoE base rate of around 3.5% in 2015. That's not going to stop new borrowers entering the market.

Depends on the margins...