Banks withdraw fixed-rate mortgage offers

mystic_trev

Artice in todays Telegraph.

"Banks and building societies pulled many fixed-rate mortgage deals off the market yesterday, denying borrowers the chance to avoid the Bank of England's next increase in interest rates"


http://www.telegraph.co.uk/news/main.jhtml;jsessionid=OVDMWUGO4ABDPQFIQMGCFGGAVCBQUIV0?xml=/news/2007/01/16/nbanks16.xml

movieman

denying borrowers the chance to avoid the Bank of England's next increase in interest rates

LOL: as though banks would want their debtors to avoid a rise in interest rates...

witney123

Its great I was advised the other day to stay clear of a fixed rate of 5.39% for two years so I can merge two mortgage acounts together......looks as if I have had poor advice from my broker since his advice interest rates go up and look like another rise soon.

AndyWallace

witney123 wrote:

Its great I was advised the other day to stay clear of a fixed rate of 5.39% for two years so I can merge two mortgage acounts together......looks as if I have had poor advice from my broker since his advice interest rates go up and look like another rise soon.

C&G are offering 5.25% fixed for 2 years with no fees. Could be good advice actually.

Andy.

arkie

lenders are not withdrawingthe fixed rates , they are repricing them , most of them have raised the fixed rate products by 0.25%,

MortgageMamma

This is just the press causing chaos again. Most lender reprice their products after a rate rise. it happens all the time. this is just heightened sensitivity and media hype because there have now been three rate rises.

UK007BullDog

Al_Mac wrote:

They are always planning for what's happening. The paper at the weekend pointed out they where already moving, prior to the rise.

That is because the cheap deals they got in the summer and autumn are now sold. They had to buy in at the higher rates in autumn and winter during the last 2 rate rises. That is why rates have gone up already before the BoE Rate Rise.

The rate rise this month was a shock for the lenders as most did not expect it until February (me included), but now is talk for another rate rise next month. Personally I would have thought March April, but who knows where the market goes.

Pulling rates or repricing them, does not really matter how you call it. The fact is to borrow money to buy that nice big house or flat is going to cost the buyer.

moggsy

What is interesting though is that some of the banks/building societies have completely removed their fixed mortgage products:

http://www.skipton.co.uk/mortgages/products/baseRateChange.asp

Seems that they were really taken by surprise by the rate increase and have had to quickly pull their fixed deals while they work out what to do next.

tigerminxy

Kent Reliance pulled all but their 25 year fixed rate.

UK007BullDog

You will soon see new rates. maybe even tomorrow.

Read in the papers that they expect another rate rise in March.

Am I glad I fixed. I lost out a little when the rates dropped but now I am way benefiting again as my fixed rate is a lot lower.

I wish I had a crystal ball to look into the future for the rates.

MarkyMarkD

If the lenders are expecting a rate rise, then the market is pricing it into swap rates and the fixed rates won't actually need to go up when the base rate rises.

If the lenders are NOT expecting a rate rise, then the market is NOT pricing it into swap rates and fixed rates WILL need to go up when the base rate rises.

We are in the second situation.

Worse than that, if lenders don't expect a rate rise, they won't bother buying lots of fixed rate money ahead, because they won't expect a sudden rush in demand. Because of the surprise rise, lots of people suddenly wanted fixed rate loans (at the old rates) so all the money available disappeared very quickly.

All this rubbish in the papers about lenders profiteering and selling money they bought cheap at a higher price is made-up nonsense IMHO. If it WAS the case, lenders would all be re-pricing immediately rather than withdrawing their products and then sorting things out to re-launch once they've obtained new funds.