MSE News: Rate drop fuels cheap mortgage hope

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Former_MSE_Helen
Former_MSE_Helen Posts: 2,382 Forumite
in Mortgages & endowments
"Hopes of cheaper mortgage deals were fuelled this week after lenders' borrowing rates tumbled to an all-time low ..."
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Rate drop fuels cheap mortgage hope


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  • HAMISH_MCTAVISH
    HAMISH_MCTAVISH Posts: 28,592 Forumite
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    Banks continue to make near record margins on mortgage lending above their funding costs, issuing only a third of the mortgages they did in previous years but at three times the profit margin.

    Unsurprising, given that the top 5 banks in the UK control around 90% of the market now, so can engage in cartel-like pricing behaviour.

    This rip-off will continue until proper competition returns to the markets.
    “The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.

    Belief in myths allows the comfort of opinion without the discomfort of thought.”
    -- President John F. Kennedy”
  • buzi
    buzi Posts: 139 Forumite
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    thanks helen - i was thinking of moving from halifax svr to 2 year fix but rate isnt great so maybe they will bring down rate?
  • The_J
    The_J Posts: 1,250 Forumite
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    buzi wrote: »
    thanks helen - i was thinking of moving from halifax svr to 2 year fix but rate isnt great so maybe they will bring down rate?

    I'm afraid you are confusing a bank with a charity. I can't see them bringing down the SVR. On the flip side, if you wait they may improve the fixed deals.
    The J is a Financial Advisor-This site doesn't check anyone's status and as such any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Always seek professional advice.
  • buzi
    buzi Posts: 139 Forumite
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    yes thats what i was saying that they might bring down the fixed rate
  • betmunch
    betmunch Posts: 3,126 Forumite
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    They might put it up though, just because new deals seem to be coming down with other lenders doesnt mean that customer retention deal with you current lend will go down.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, 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.
  • buzi
    buzi Posts: 139 Forumite
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    and if they dont then sounds like the cartel-like pricing mentioned in #2 - crooks in suits!!
  • VT82
    VT82 Posts: 1,079 Forumite
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    I understand money market rates and swap rates (I work for a financial institution and understand our mortgage pricing model), but have never heard of 'wholesale mortgage rates' like it says in the article. Is this just a made up term, a word for something else that I would actually have heard of, or is this a gap in my knowledge?
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    edited 21 June 2012 at 11:00PM
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    VT82 wrote: »
    'wholesale mortgage rates'

    I'm a Corporation with £10 million pounds to deposit for a year. What rate of interest will you offer me?
  • brit1234
    brit1234 Posts: 5,385 Forumite
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    Despite all this Bank of England flooding in I expect mortgage rates to shoot up. The money was to counter the Euro crisis pushing LIBOR rates up, however the rating agencies are about to downgrade our banks ratings making it more expensive to borrow.

    I expect short term falls followed by moderate rises to far larger rises when the markets look at the UK after the Euro crisis.
    :exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.

    Save our Savers
  • HAMISH_MCTAVISH
    HAMISH_MCTAVISH Posts: 28,592 Forumite
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    brit1234 wrote: »
    I expect short term falls followed by moderate rises to far larger rises when the markets look at the UK after the Euro crisis.

    So then based on your posting history accuracy, there's precisely zero chance of it playing out that way. :)
    “The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.

    Belief in myths allows the comfort of opinion without the discomfort of thought.”
    -- President John F. Kennedy”
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