Will mortgage rates come down after carney's statement?

Mr_Incredible

will they come down further, whats the likelihood?

holly_hobby

Personal opinion, but I really doubt it - given we've been at 0.5% for quite a while now, I do think the product rates on offer are generally as low as can be expected (notwithstanding of course any marketing exercise by any given lender)

But I must also add that my crystal ball is currently in for a service ... !

Holly x

deano3

holly_hobby wrote: »

Personal opinion, but I really doubt it - given we've been at 0.5% for quite a while now, I do think the product rates on offer are generally as low as can be expected (notwithstanding of course any marketing exercise by any given lender)

But I must also add that my crystal ball is currently in for a service ... !

Holly x

what about on a standard 95% LTV, not help to buy?

Thrugelmir

Mr_Incredible wrote: »

will they come down further, whats the likelihood?

Very low. The squeeze is still on the banks to improve their balance sheets. Banks are derisking. So there's no incentive to lend money at low margin at high risk.

kingstreet

AIUI this was about rates not rising.

Not rates falling.

The BoE/FCA is not relaxing capital requirements for high LTV mortgages until next year when HTB-MG is launched in January. Until then, expect to see no reduction in rates for high LTV business.

I believe HTB-MG will see 95% products at the same kind of rates as current NewBuy products - around 4.5%.

BookerTee

They certainly should do, I cant remember a time when mortgage rates have been consistently 6 to 10 times the base rate!

However the banks are coining it in so are unlikely to do anything that might effect their bonuses.

Pont

Hmm - I think there will be a possibility of a glut of lenders suddenly coming up with tempting 10 year fixes!
'Cos Carn-la is suggesting all is gonna go pear shaped in 3 years time - innit?!

Mr_Incredible

well i was more thinking that current rates priced in an expected rise in base in the next couple of years, but with carney saying there will be no increase in base rate until unemployment drops below 7% which is in of itself not forecast to occur for 3 years, that provides the lenders relative certainty that there will be no increase in base rate for circa 3 years.

Ergo, it should follow that they can imply this certainty into their own margin over base and reduce...

However I understand that mathematical logic doesn't allways follow and at the end of the day its about making money and to some extent the lending institutions seem to act more like an oligopoly that actually compete with each other...

kingstreet

Base rate has very little influence over mortgage lending. Products are priced according to the swap rates the lender can obtain for the rate type they want to offer.

This is currently slightly skewed by FLS where they are raising capital at around 0.75%, but this is being used for low LTV stuff lenders can securitise.

There is little funding for high LTV products around because of the capital requirements lenders face. From January 2014, those will be relaxed for HTB-MG cases.

Mr_Incredible

I'm looking at 60%LTV not high

kingstreet

You are looking at the best rates in the market and these have been bumping along around the 2.5% mark (5Y Fixed) since FLS launched. It's possible rates may fall a little as lenders look to use up their FLS allocation to avoid being penalised by the Government in April next year, but there won't be major reductions, possibly the odd 0.1% here and there.