I was up before the crack of dawn yesterday morning, 4.15 am to be precise, for a stint on BBC Radio 5 Live’s’ “Wake Up To Money” followed by BBC Breakfast TV chatting about mortgage rates after one too many cups of strong coffee. We were talking about the different predictions around Bank Base Rate and what the hell the general public make of it all when it comes to making their own decisions with regards to their own mortgage.
A week may be a long time in politics, but in the lending market at the moment a week can represent a complete transformation in product choice that would normally evolve over a long period of time.
In a short space of time we have seen the return of some welcome elements of competition which, together with a fall in the cost of funds, has pushed product rates down. Some lenders, such as a re-invigorated Woolwich, have cut their rates by up to 0.6%, whilst others such as a totally reformed Northern Rock, have made an aggressive play to dominate the Best Buy charts.
I have just spent this morning looking at the much anticipated new FSA proposals for the mortgage industry, which weighing in at 118 pages is a healthy size, (actually my scan reading powers were put to the test to be honest!)
Whilst the majority of the proposals in themselves are not unexpected, the key will be in their implementation to ensure they benefit not only the industry, but ultimately the consumer.
We all know that there has been a need for a while now to drive out the darker elements and re-professionalise the mortgage industry, especially at a time when more and more people need advice.
Whilst I have been away for a week in the deepest recesses of Longleat Forest, I have been keeping up to date with the various comments by the great and good around the future of Bank Base Rates and mortgage products generally.
There are some very interesting observations to be made around some of the comments made.
Acouple of things have caught my eye this week in terms of mortgage lending institutions. First of all we have the British Banking Association, (BBA), defending the large gaps between LIBOR rates and the product pricing we are seeing, and we also have a Which report on what 2000 of their members say are the best and worst mortgage lenders.
As far as 3 month LIBOR is concerned this was always the reason that lenders used for not lending during the height of the credit crunch when it was artificially high. Now, according to Moneyfacts, “Three-month Libor is at 0.55 per cent, while the average two-year tracker rate is 3.76 per cent. Two-year swaps, which lenders use to fund fixed-rate mortgages, are at 1.84 per cent, compared with the average two-year fixed-rate deal at 5.13 per cent”.
Andrew Montlake, Director and Spokesperson for Coreco, gives his honest and forthright views on the mortgage market, economy and all things property related. Monty was voted "Mortgage Personality of the year 2008" and is the current holder of the British Mortgage Awards "Best Press Spokesperson" title. Expect expert analysis, delivered in a down to earth style with a side helping of exuberance.
