Will mortgage rates come down after carney's statement?

John1993_2

BookerTee wrote: »

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.

This makes no sense at all. Base rates are short term rates, mortgage rates tend to be for a period of years. Why should long-term rates drop in line with money market rates, when all expectationas are that base rates will rise on a couple of years' time?

charlesh

They certainly should do in my opinion.
Friends of our have been offered base rate + 0.5% for the life of the mortgage :shocked: to port their Alliance & Leicester mortgage to new owners Santander. Clearly Santander want to offer a strong incentive here to rationalise the products they have to operate, but none of the current best buys can get close to this sort of offer. With support from the government such as the Funding for Lending scheme, lenders should be trying a lot harder. It seems to me to be a very uncompetitive market currently.

Mr_Incredible

John1993 wrote: »

This makes no sense at all. Base rates are short term rates, mortgage rates tend to be for a period of years. Why should long-term rates drop in line with money market rates, when all expectationas are that base rates will rise on a couple of years' time?

because no one expects them to rise exponentially, the 90's crazieness won't happen again and the governments have comitted to low interest rates for medium term.

demontfort

Mr_Incredible wrote: »

because no one expects them to rise exponentially, the 90's crazieness won't happen again and the governments have comitted to low interest rates for medium term.

Wow that 90s craziness look very sane in comparsion to the crazy 0.5% interest rates that the clowns at the BoE have presided over for the last 5 years.

Carney is more than happy to keep inflating the house price bubble knowing that when it does pop he can skulk off elsewhere.

John1993_2

demontfort wrote: »

Wow that 90s craziness look very sane in comparsion to the crazy 0.5% interest rates that the clowns at the BoE have presided over for the last 5 years.

Carney is more than happy to keep inflating the house price bubble knowing that when it does pop he can skulk off elsewhere.

You seem to know a lot about Carney's motivation, and plans. How diid you come by this? I assume it's not just ignorant speculation, is it?

Atomix

kingstreet wrote: »

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.

Good post indeed - people mis-perceive mortgage rates with interest rates (other than a tracker). There is every possibility that mortgage rates might actually go up slightly - and that has nothing to do with the interest rates - its to do with the cost of borrowing by the bank... Its happening in Canada already - google canada mortgage rates - be warned everyone - the bank of england can say what it likes, if the banks wish to, they could increase their rates without any rate increase

Thrugelmir

demontfort wrote: »

Carney is more than happy to keep inflating the house price bubble knowing that when it does pop he can skulk off elsewhere.

Hard to see another property bubble in the foreseeable future. As soon as the economy recovers in a true sense. Then BOE will raise interest rates to curb domestic inflationary pressures.

The Government of the day still has tax rises/ expenditure cuts to make to balance the books. While consumers are still overburdened with debt. Easy forget this is the worst recession since the 20's and 30's. Given the amount of intervention there's been. Ultimately it all all has to be paid, there's nothing for free.

While interest rates are low by all means borrow. However make plans to repay the debt earlier rather than later.

demontfort

John1993 wrote: »

You seem to know a lot about Carney's motivation, and plans. How diid you come by this? I assume it's not just ignorant speculation, is it?

Speculation - Yes, I'm not privy to the workings of Carney's feeble mind.

Ignorant - No and I'd wager a lot of money that given my profession and background I'm considerably better informed about finance and economics than yourself son :rotfl::rotfl::rotfl::rotfl:

kingstreet

Atomix wrote: »

Good post indeed - people mis-perceive mortgage rates with interest rates (other than a tracker). There is every possibility that mortgage rates might actually go up slightly - and that has nothing to do with the interest rates - its to do with the cost of borrowing by the bank... Its happening in Canada already - google canada mortgage rates - be warned everyone - the bank of england can say what it likes, if the banks wish to, they could increase their rates without any rate increase

Why thank you.

It's nice to know that thirty years (God, has it been that long?) experience and training, examinations and blood, sweat and tears doing this job has actually qualified me to comment accurately on the way lenders price mortgage products in this country.

Sorry, Atomix - but after the day I've had today, a certain amount of irony is absolutely necessary. Particularly if my friend Mr Steinhauser (£3.69 for six from Aldi) has anything to do with it!

Mr_Incredible

well fixed mine for 2 years at 2.14%