£50BN SO when will banks lower their mortgage rates

BTLNEWbie_3

pickles110564 wrote: »

CBS have just past on a cut on our several BTL mortgages with them, lets hope others follow too for the OO's

If this keeps up maybe we wont see so many BTL LL's and OO's going to the wall, great news for everybody.:T

motch

Ma77hew wrote: »

Nope, I have a fixed mortgage, the letter was about their standard rate decreasing.

really? handy for existing safe borrowers but read below

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/04/26/nfinance126.xml

I think Guy_Montag could be right with the rates heading
back up to the long term average ie higher than now.

I think the £50,000,000,000 lent is mainly to bolster the banks real money reserves (or at least to keep their money supply going) to ensure they don't go under in the near future

Debt_Free_Chick

nutmegman wrote: »

with all this extra cash flowing when will the banks stop funding thier bottom line with high mortgage deals

It's not extra cash, as such. The banks are swapping other assets for government bonds (debt). Effectively, they're borrowing .... but with the credit crunch limiting the funds available to borrow in the commercial lending market, the Government is offering them loans instead.

free4440273

All this does is prop up failed institutions (those which deserve to fail because of their stupidity and/or malpractice): this will have little or no impact on mortgage rates (which are going up: just have a look at the swap rates at the moment): and the money will probably be used for 'disingenuous' purposes.

dippy

The best of all is that these banks are borrowing taxpayers' money from the Bank of England and lending it back to us at a higher rate. We are being taken for mugs.

Generali

The £50 billion is less than 2 months worth of mortgage lending for last year (£362,000,000,000 was borrowed on mortgages in 2007 according to the CML).

The thing is, the price of mortgages like everything else is just a function of supply and demand. Supply of mortgages has fallen as banks think that mortgage lending has become more risky so they require a higher profit margin to make it worthwhile.

If demand for mortgages remains much the same then that implies higher prices which is what we are seeing.

nelly_2

Generali wrote: »

The £50 billion is less than 2 months worth of mortgage lending for last year (£362,000,000,000 was borrowed on mortgages in 2007 according to the CML).

The thing is, the price of mortgages like everything else is just a function of supply and demand. Supply of mortgages has fallen as banks think that mortgage lending has become more risky so they require a higher profit margin to make it worthwhile.

If demand for mortgages remains much the same then that implies higher prices which is what we are seeing.

How many average (£200 000) houses does 50 billion buy?

Is it 5 thousand?

motch

nelly wrote: »

How many average (£200 000) houses does 50 billion buy?

Is it 5 thousand?

250,000 houses

cadavari

motch wrote: »

250,000 houses

Yes but that money won't be used for that. Too bad!

Griptool

nutmegman wrote: »

with all this extra cash flowing when will the banks stop funding thier bottom line with high mortgage deals

Northern Rock's mortgage book is around £117 Billion in three years time the projected mortgage book is £50 Billion.

So £50 Billion will not even cover the money being sucked out by NR - Swervin Mervyn will be dishing out some more cash soon - But it will only screw the currency (:rotfl:) and the bond markets.

The banks losses and solvency issues are far from over so don't expect to see easy credit any time soon (years not months)