fixed rate deal changes

kingkano

How quickly after a BOE rate rise will the fixed rate deals run out/change at the banks? (northern rock I guess in particular).

Am I right in thinking you don't have the rate advertised until your mortgage application is actually approved??

To flesh it out we are looking at a longer term fixed rate (maybe 10yrs) but if rates went up 0.5% I wouldnt really be interested (it'd make the mortgage alot and to fix for such a long period.....).

Thanks in advance

Leon_W

Fixed rates are not determined by BOE rate rises as such. Fixed rates are determined by swap rates in the market so lender A may buy in funds at X amount to resell at Y amount.

Although we have had interest rate rises, some lenders have been cutting fixed rates as the money market has been able to supply funds cheaper (maybe not for long though !)

It's obviously a lot more complicated than that but I was just trying (perhaps badly) to explain in laymans terms that fixed rates are not directly linked to BOE rate rises.

The rate on your mortgage is booked at the Application stage, not approval to answer your other question.

kingkano

Thanks Leon. I remember that now from my reading of posts on here (swap rates, carry trade etc). Although most of the deals do seem to change in line with BOE changes it seems at times!!

I didnt realise its at application time which is more useful. So long as we can get moving in the next few weeks it should be ok

cheers