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 was up at the crack of dawn today for a quick comment on Wake Up To Money on BBC 5 Live, where the topic was the fact that LIBOR rates have now fallen substantially. 3 month LIBOR, which was so far out of kilter a few months ago and used as the main excuse behind lack of funds is now down at 0.75%, basically back to a “normal” level.
If this is the case, then why have rates not decreased?
For me Lenders at the moment are pricing based on three areas; cost, profit and fear.
Andrew Montlake, Communications Director at Coreco and ‘Mortgage Personality of the Year 2008’, gives his views — honest and no holds barred — on the latest developments within the mortgage and property markets.
