UK Mortgage Rates To Rise

From the Times of London:

Some of Britain‘s biggest lenders, including Abbey and Nationwide, trimmed rates last week. The inflation report sent rates in the wholesale markets soaring, suggesting rates on offer to homeowners would also head up, at least in the short term.

Nationwide also cut its headline two-year fix, albeit by just 0.15 points to 6.15%, with repayments on a £200,000 loan now £1,307.

Only “good” borrowers with a 25% deposit or equity in their home will benefit from this rate, though.

Swap rates – which lenders use to fund their fixed-rate deals – leapt to 5.75% last week; they were 5.24% a week earlier.

Boulger said: “Fixed-rate mortgages were tipped to fall as long as there were expectations that the Bank would cut interest rates. The new rates are out of step with the market. We look at the future for rates and the best mortgage deals.

What is likely to happen with interest rates?

Last week’s data suggest the Bank may be more reluctant to cut rates – bad news for existing homeowners with tracker mortgages and for future homebuyers who were hoping fixed-rate mortgages would come down.

Most forecast at least one more quarter-point rate-cut before the end of the year. This would take the bank rate to 4.75%. My deal doesn’t end until the autumn. Nationwide and Abbey will let you book a rate six months in advance. Nationwide’s deals apply for two years from the date of completion.

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
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