MSE News: Eurozone crisis could push mortgage rates up

Thrugelmir

Consumerist wrote: »

Just a thought but if that sentiment is repeated throughout the mortgage industry then it bodes well for savers down the line if only the BoE could be relied on to constrain inflation. Little hope of that with QE working its way through the system.

Merely a slow return to how it used to be. Around the year 2000 mortgage debt was entirely funded from retail deposits. Trouble is now lenders are dependent on some £600 billion of wholesale funding finance.

daveg72

Luckily, I'm not in a postition where my rate has risen, but the banks have re-written the rule book on mortagage rates and variable interest rates. It's scary and disgusting that they have been allowed to get away with doing this and I really hope that at some point in the future they are made to pay it all back as with PPI and to an extent charges.

ReflexReaction

Wait a minute. They're talking about SVRs right - not the base rate? This announcement from the BoE could have been clearer imo.

mrbilbs

Im on a LIBOR mortgage - currently Im paying less than I would be if I was on a high street one. Any thoughts from anyone how the LIBOR rates will go. I think with all the current trouble they will go back up again but I do hope Im wrong. I know I wouldnt be able to move for a good few years yet anyway.

samtoby

What happens if everyone takes their money out of Santander?

brit1234

mrbilbs wrote: »

Im on a LIBOR mortgage - currently Im paying less than I would be if I was on a high street one. Any thoughts from anyone how the LIBOR rates will go. I think with all the current trouble they will go back up again but I do hope Im wrong. I know I wouldnt be able to move for a good few years yet anyway.

I expect LIBOR to keep rising like it has done the previous months. The chart on the link shows how it is going up and how much it has gone up from last week, last month and last year.

http://www.bankrate.com/rates/interest-rates/libor.aspx

jamesd

samtoby wrote: »

What happens if everyone takes their money out of Santander?

Santander UK borrows money from emergency funds provided by the Bank of England and the Europeans. Maybe a takeover is arranged. Santander in Spain tries the same but from the EU.

If for some reason those things don't happen the FSCS takes over and uses the living will provisions to cause the accounts to continue operating normally, borrowing whatever it needs from the Treasury under it's pre-arranged facility to do that.

Regulators have hugely improved their handling of this since Northern Rock.

Bloomberg

brit1234 wrote: »

This will help deflate the housing bubble faster, let hope the house price falls are speeding up so people can buy affordable homes again.

Even with these coming mortgage rate rises they will still be low on a historic basis. I just hope they bump interest rates for savers who have been the true loosers this last 4 years.

Mortgage payers have had it too good for too long at the expense of those who have been careful with their money. Us savers have been punished on account of those who have taken out mortgages which are too big for their incomes. Lets get rates back up where they should be, 0.5% is a big falsehood which is unsustainable. The housing market will crash eventually, the government are just delaying the inevitable and they know it.