Nationwide shuts door on mortgage hunters

lkalka

Interesting article: -
http://business.timesonline.co.uk/tol/business/economics/article3632616.ece

sarkin

Chelsea have been closed all week

CLick for link

MiserlyMartin

Interesting. Somebody asked why Nationwide couldn't just tighten their lending criteria rather than raising tracker rates. I would guess the answer to that is that they want to make a certain amount from their mortgages so they need to compensate for this by raising rates to the fewer borrowers they will have to maintain the turnover,

Caffca

Lord, anyone trying to get back onto the property ladder (whether FTB or buying after selling and renting) just can't win. Initially - prices soaring so if you're being sensible about income multiples, there's nothing to buy and now prices (not soaring so much - not getting into a HPC debate), interest rates are going up cos no-one wants new business, so you can find a house in the right price range but compared with just 3 months ago, the interest rates are going up making affordability an issue again for your monthly repayments!!

I give up. I'm obviously destined to have to keep living at my mum's forever - I will go mad (mind you, they tend not to lock you up for murder while insane do they?! )

mystic_trev

http://news.bbc.co.uk/1/hi/business/7317334.stm

meanmachine_2

MiserlyMartin wrote: »

Interesting. Somebody asked why Nationwide couldn't just tighten their lending criteria rather than raising tracker rates. I would guess the answer to that is that they want to make a certain amount from their mortgages so they need to compensate for this by raising rates to the fewer borrowers they will have to maintain the turnover,

I should also imagine it's because they don't want to pop up on broker's screens or in those Sunday paper best buy tables.

Tightening criteria wouldn't necessarily stop that - they'll still be flooded with enquiries/applications - the vast majority of which will need to be dealt with/rejected.

Gorgeous_George

I said some months ago that affordability was probably better and that lower prices may not improve affordability.

HPI was caused, primarily, by carefree lending (NOT BTL) and the crash/correction (delete as appropriate) will be brought about by tighter lending.

GG

GG

BACKFRMTHEEDGE

Sorry I'm abit thick:rolleyes: Does this mean the tracker rate is going up for new borrowers?:rolleyes: or are they upping the rate on existing trackers too?

lkalka

BACKFRMTHEEDGE wrote: »

Sorry I'm abit thick:rolleyes: Does this mean the tracker rate is going up for new borrowers?:rolleyes: or are they upping the rate on existing trackers too?

I think it's new borrowing but not 100% sure. More details can be found here though: -
http://www.nationwide.co.uk/intermediaries/latest-news/mortgage_rates280308.htm

ManAtHome

MiserlyMartin wrote: »

Interesting. Somebody asked why Nationwide couldn't just tighten their lending criteria rather than raising tracker rates

I reckon they're trying to avoid yet another BoE stitch-up. Merv-Trackers haven't really been good business over the last 6 months, unlike LIBOR trackers...

MarkyMarkD

Lenders are losing a tonne of money on existing trackers, priced when the margin between BBR and LIBOR was sensible.

It is scarcely surprising that they are seeking to recoup some of this on newer mortgages - cross-subsidising from today's borrowers to the lucky people who signed up a year ago.

Somebody asked why Nationwide couldn't just tighten their lending criteria rather than raising tracker rates.

Somebody stupid, presumably? They are not a charity. They can sell any number of mortgages to people who are quite credit-worthy. Tightening criteria won't stop the flood of applications they are getting.

Far more sensible to put prices up and "turn off the tap".