Rate Cuts Illusory In UK

From the Guardian:

Borrowers need a 25% deposit for Abbey’s fixed-rate deal.

Two of the UK‘s biggest lenders, Nationwide building society and Abbey, today cut rates on their fixed-rate deals by up to 0.3%.

The society’s five-year fixed-rate deal with a £699 fee has been reduced from 6.15% to 5.85%.

Abbey is offering a similar deal for borrowers with at least 25% to put down as a deposit at a rate of 5.75% – 0.17% below its previous rate.

Money market rates, on which fixed-rate mortgages are based, had been falling on the expectation of more interest rate cuts from the Bank of England, but earlier this week these expectations were dashed by high inflation figures.

Boulger said the recent popularity of fixed-rate mortgages, which last month saw 70% of John Charcol’s clients opt for this type of deal, and a change in the outlook for tracker rates, meant the Abbey and Nationwide deals would not be around for long.

The cuts come as research shows borrowers are paying more for short-term fixed-rate deals than at any time since 2000.

Figures from financial information firm Moneyfacts show the average cost of a two-year fixed-rate mortgage stands at 6.64%, which means a borrower with a £150,000 mortgage faces monthly repayments of more than £1,000.

About Luke Ford

Raised a Seventh-Day Adventist at Avondale College in Australia, Luke Ford moved to California in 1977. He graduated from Placer High School in 1984, reported the news at KAHI/KHYL radio for three years, attended Sierra College and UCLA, was largely bedridden by Chronic Fatigue Syndrome for six years, and converted to Judaism in 1993. From 1997-2007, Luke made his living from blogging. Living by Beverly Hills (Alexander90210.com), he now teaches the Alexander Technique (moving the way the body likes to move). Lessons cost $100 each and last about 45 minutes. In 2011, Luke completed a three-year teaching course at the Alexander Training Institute of Los Angeles. His personal Alexander Technique website is Alexander90210.com. Luke is the author of five books, including: » The Producers: Profiles in Frustration » Yesterday’s News Tomorrow: Inside American Jewish Journalism
This entry was posted in Britain and tagged , , , , , , , , , , , , , , , , , , . Bookmark the permalink.