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MSE News: ALL borrowers should benefit from lower mortgage rates, says Which?

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MSE News: ALL borrowers should benefit from lower mortgage rates, says Which?

edited 30 November -1 at 1:00AM in Mortgages & Endowments
12 replies 1.9K views
Former_MSE_HelenFormer_MSE_Helen
2.4K posts
edited 30 November -1 at 1:00AM in Mortgages & Endowments
"Lower borrowing costs should be passed on to all borrowers, not just those with significant equity, it is claimed ..."
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  • gadgetmindgadgetmind Forumite
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    Lending at a higher LTV is riskier so it's perfectly natural that a lender would want more return for doing this.

    http://en.wikipedia.org/wiki/Risk_premium
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
  • kingstreetkingstreet Forumite
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    I think they mean all NEW borrowers should benefit...

    There's no reference to existing borrowers not moving house.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • HAMISH_MCTAVISHHAMISH_MCTAVISH Forumite
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    Excellent news to see such a well respected organisation as Which joining the growing calls for mortgage rationing to end.

    Given that the average repossession rate across the last 4 boom and bust cycles is just 0.78%, the risk from uk mortgage lending, even including the lending at peak, is virtually zero.

    Even Northern Rocks bad bank, containing the worst of the worst of Uk mortgages, made 750 million pounds in profit last year alone.

    UK banks lost £15 on overseas mortgages for every £1 they lost on UK mortgages, and would not have needed a bailout at all had they just stuck to lending here, rather than overreaching themselves globally.

    So as clearly UK mortgage lending standards were never the problem, then the solution cannot be to force an entire generation to rent rather than buy.

    Great that Which see this, and about time Martin joined in with a campaign to reduce deposit sizes and bank margins above base for all borrowers, especially FTB's.
    “The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.

    Belief in myths allows the comfort of opinion without the discomfort of thought.”

    -- President John F. Kennedy”
  • Perhaps Which? should start issuing mortgages themselves.
  • ThrugelmirThrugelmir Forumite
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    “Buy value, not market trends or the economic outlook. Individual stocks determine the market, not vica versa." - Sir John Templeton
  • brit1234brit1234 Forumite
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    This on the same day as 1 in 4 owners fears repossession.

    http://www.independent.co.uk/property/one-in-four-people-are-worried-about-their-home-being-repossessed-8222325.html

    Its only right that lenders price on risk especially with further falls in house prices coming. We don't want a return to irresponsible lending where public debt is increased and public services cut to bail out the banks again. The banks are pricing in the coming house price falls.

    Any way mortgage rates are still historically low even on the highest cost mortgages.
    :exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.

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  • edited 24 October 2012 at 10:01AM
    gadgetmindgadgetmind Forumite
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    edited 24 October 2012 at 10:01AM
    Many UK banks have very high LTV mortgages on their books and forbearance has up to now hidden the scale of the problem.

    http://www.mortgagestrategy.co.uk/latest-news/forbearance-hiding-true-arrears-level-says-bank/1033948.article

    Most people are hoping that the UK housing market manages to somehow keep stumbling along. The alternative would be very nasty for the banks and quite a few borrowers as we saw in Ireland and Spain.

    This link is also interesting.
    http://www.telegraph.co.uk/finance/comment/9591511/Subtle-shift-signals-profound-change-in-bank-regulation.html
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
  • ILWILW
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    Which have also been banging on about higher rates should be offered to savers.

    Do they still use the rather questionable marketing techniques they used to be famous for?
  • gadgetmindgadgetmind Forumite
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    ILW wrote: »
    Which have also been banging on about higher rates should be offered to savers.

    Why should banks offer any more than they offer now? Anything over 3% is over-subscribed within days, so there is clearly no commercial need for them to offer more.

    Supply and demand.
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
  • ILWILW
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    gadgetmind wrote: »
    Why should banks offer any more than they offer now? Anything over 3% is over-subscribed within days, so there is clearly no commercial need for them to offer more.

    Supply and demand.

    Same with mortgages, banks can sell as many as they wish so why lower rates.
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