Funding for lending: Epic Fail

Thrugelmir

the_duke_of_hazzard wrote: »

Since FLS, the rates have improved significantly for lower LTVs...

Lower rate is only applicable for initial term of product then reverts to higher SVR rates. Banks are playing it safe by doing this and asking for 40% deposits.

HAMISH_MCTAVISH

the_duke_of_hazzard wrote: »

You can fix for 7 or even 10 years on a historically low rate. You can remortgage when the time's up as well (assuming you've not paid the mortgage off by then). I wouldn't be surprised if rates were still low in a couple of years' time anyway.

You can fix for 25 years at 5.29% if you so choose.

I think you'd be a mug to do so, but the option is there.

Thrugelmir

the_duke_of_hazzard wrote: »

You can fix for 7 or even 10 years on a historically low rate.

History has no particular relevance as at today. What's the best 7 or 10 year rates available currently?

DecentLivingWage

Just been watching bbc newsnight, people are saying The Funding For Lending scheme is another bank bailout with a different name. I* wonder if it could be as simple as everyone waiting to see what the economy does at election 2015 - no-one likes a coalition confidence wise, particularly a wobbly one.

wotsthat

There are penalties for drawing down cash but not lending it back out. Looks like banks may have drawn down cheap cash, lent it out at low risk but reduced the amount they would've otherwise have lent out at a higher risk.

Not what the government hoped for I'm sure.

Still early days - a 1% drop in deposit rates seems like a lot to attribute to something that, net, appears to be making no difference.

Graham_Devon

wotsthat wrote: »

There are penalties for drawing down cash but not lending it back out. Looks like banks may have drawn down cheap cash, lent it out at low risk but reduced the amount they would've otherwise have lent out at a higher risk.

Not what the government hoped for I'm sure.

Still early days - a 1% drop in deposit rates seems like a lot to attribute to something that, net, appears to be making no difference.

You can't force people to borrow. Especially not the worthy borrowers.

After all the stuff done so far that's failed, you do start wondering when sanity will take over.

wotsthat

Graham_Devon wrote: »

You can't force people to borrow. Especially not the worthy borrowers.

After all the stuff done so far that's failed, you do start wondering when sanity will take over.

You don't need to force people. If credit is available they'll borrow it - human nature - that's why sensible credit controls are needed.

What we have now is way beyond sensible credit control. The banks haven't got the money to lend and don't know when the next state sanctioned attack on what cash they do have is going to happen. Net result - no lending.

When there are surveys of the problems facing ftB's the confusingly wide choice of lenders throwing money at potential buyers seems not to be high on the list.

Thrugelmir

Graham_Devon wrote: »

You can't force people to borrow. Especially not the worthy borrowers.

Maybe its a sign of the aging population. With the post was boom nearing its peak. Saving is now the most important objective for many people , that or clearing down debt.

grizzly1911

wotsthat wrote: »

Still early days - a 1% drop in deposit rates seems like a lot to attribute to something that, net, appears to be making no difference.

You may be right but it does seem somewhat coincidental. Moneyfacts/ BBC Moneybox seem to think/suggest there is a link.

Thrugelmir

the_duke_of_hazzard wrote: »

See here:

themortgagemeter.com/#/best_buys

3.49% is the best 7, 3.99% the best 10.

Still requires 40% deposit and a £2k fee.

So targets high value property owning affluent borrowers. HSBC's target market. Safe and boring.