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Mortgage Market Competition

fergie_
fergie_ Posts: 279 Forumite
Part of the Furniture 100 Posts Combo Breaker
in Mortgages & endowments
Do we think any short term competition is going to return to the mortgage market, or are rates just going to keep going up and up across all products?

Especially now that banks are under pressure to increase the rates that they pay on deposits.

Comments

  • dunstonh
    dunstonh Posts: 121,095 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Do we think any short term competition is going to return to the mortgage market, or are rates just going to keep going up and up across all products?
    probably going to keep going up.

    Historically, interest rates have had to rise above the core inflation rate.  Currently, the markets have not priced that in.  So, if it happens, then interest rates still have some way to go up.

    It is worth noting that the market is still competitive.  It's just that rates are now back in the more typical normal range. 



    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • jimjames
    jimjames Posts: 19,230 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    fergie_ said:
    Do we think any short term competition is going to return to the mortgage market, or are rates just going to keep going up and up across all products?

    Especially now that banks are under pressure to increase the rates that they pay on deposits.
    I think you're confusing 2 different things, the overall rates offered which are likely to remain high for the foreseeable future and competition between lenders which might mean certain products are a good deal compared to others on the market. Lenders will still be trying to get the market share that their have planned in and will target borrowers with products to meet that.
    Remember the saying: if it looks too good to be true it almost certainly is.
  • housebuyer143
    housebuyer143 Posts: 4,299 Forumite
    1,000 Posts Fourth Anniversary Name Dropper
    Lenders are still trying to be competitive but the ones that take too long to increase their rates with the moving market are inundated with applications, so much so they can't function properly. 
    Even 24 hours being the cheapest on the market is enough to destabilise them. 

    When swap rates stabilise then competition will probably increase but while they are so up and down, lenders are pricing in a higher margin to account for this. 
  • fergie_
    fergie_ Posts: 279 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    housebuyer143 said:

    When swap rates stabilise then competition will probably increase but while they are so up and down, lenders are pricing in a higher margin to account for this. 
    No one has a crystal ball, but does anyone have a guess when the swap markets will settle?

    It was telling that several lenders added 0.5 points a day before the last BoE rates meeting.
  • housebuyer143
    housebuyer143 Posts: 4,299 Forumite
    1,000 Posts Fourth Anniversary Name Dropper
    fergie_ said:
    housebuyer143 said:

    When swap rates stabilise then competition will probably increase but while they are so up and down, lenders are pricing in a higher margin to account for this. 
    No one has a crystal ball, but does anyone have a guess when the swap markets will settle?

    It was telling that several lenders added 0.5 points a day before the last BoE rates meeting.
    Probably when inflation reduces and the BoE stop increasing the base rate. 
  • amnblog
    amnblog Posts: 12,782 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    The noses are in the Trough and the Lender's are displaying their backsides
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, 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.
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