ITL Mortgage rate going up and up every quarter

sussexking

Wonder if anyone can assist me on this...

I've got a mortgage with ITL mortgages and every three months they write to me and tell me my new mortgage rate based on the LIBOR rate....

For the last 30 odd months we've had a low interest rate in this country - but my mortgage rate keeps going up each quarter (not by much).. my current rate is about 3.83% and it's about to go to 3.9%....

Why is this ??

Thrugelmir

LIBOR stands for London Inter Bank Overnight Rate .

This rate is set a daily basis by the main banks in the City of London.

The rate at which banks lend to each other has steadily been increasing.
More than likely will continue to do so. Due to the contraction of and uncertainty in global financial money markets.

aimzrabbit

sussex king

you will have a mortgage same as me which is linked to libor and not the bank of england base rate

todays libor rate is 0.92 and it changes daily based on risk and as the italians have had there credit rating dropped means that current risk in banks today . if more countrys in the eurozone have problems then the banks start to get twitchy and the libor raite rizes

at the credit crunch in 2008 libor was at around 5.0

did you take out a subprime mortgage with a lender such as beacon ? a few years ago

you will have a deal which is called a libor + a load

my deal is 5.0 + libor so im currently paying 5.85

respond please reply if you need more info

kingstreet

Thrugelmir wrote: »

LIBOR stands for London Inter Bank Overnight Rate .

This rate is set a daily basis by the main banks in the City of London.

The rate at which banks lend to each other has steadily been increasing.
More than likely will continue to do so. Due to the contraction of and uncertainty in global financial money markets.

I thought the O stood for Offered?

MarkyMarkD

It does.

antrobus

Absolutely it's; London Inter Bank Offered Rate, (as opposed to LIBID, or LIMEAN or anything else) and LIBOR is quoted for a number of different maturities ranging from overnight to one year, as well as a number of different currencies, so there's actually 150 LIBORS. Somewhere in the depths of the original mortgage agreement it will tell you which GBP LIBOR rate is used as a benchmark, and whether they take an average over a period, or a month-end rate or whatever. It's calculated by Reuters on behalf of the British Bankers Association based on quotes supplied by a panel of banks.

If you look around the interweb you'll find plenty of sites that will provide data and charts of LIBOR over the recent past. The GBP LIBOR one month rate (which is often the one mortgages are linked to) has crawled up this year from about 0.60% to 0.68%, which would explain the sort of increase quoted in the ITL rate.

aimzrabbit

I think the OP was asking though that why they were having interest rate increases every qt as base rate hasn't moved

and judging by the posted rate of 3.83 would suggest that they have a uk libor + a load of 3% reseting every quarter

the OP will need to budget for a libor move as you guys well know that if the base rate does go up libor will track with it

so to save confusion

if in 2012 the OP has a libor set on Jan 1st 2012 at 1.00 % + 3 and the base rate went up 0.25% for 3 months , the OP would have new libor if it tracks with base rate rises at 1.75% + 3 at the april 1st quaterly reset

this would be a increase of around £75 per month on a 100K mortgage ish

I have a former beacon deal and 1 year left to run and i watch this like a god damn hawk

Gary

MarkyMarkD

More likely, LIBOR will lead BBR upwards, so anyone with a LIBOR tracker will incur the rate increases earlier than someone with a BBR tracker. But BBR trackers normally reset monthly, compared to LIBOR trackers which are normally quarterly.

sussexking

cheers for your replies back on this...

Paying under 4% interest rate on my mortgage sounds like a pretty good deal - if some others are paying nearer 6%!! - maybe i should just keep quiet then and not rock the boat on that LOL!

Having defaulted on loans/cards etc - originally I had debts (exc mortgage) of around £70k - well after 6 or 7 years now i've got that to under £40k!!!

I'm paying about £430 a month on an interest only mortgage (on a mortgage of £132k with ITL at this current percentage and this is managable - doesn't sound like mortgage rate interest will be going up for at least the next year or so!!

Does anyone else with serious debts etc able to get a good mortgage deal at a better rate ??

Cheers