What Direction are Mortgage Rates going in the UK?

2008-04-30T15:58:25-04:00

Last November, The Economist reported that they expected two rate cuts in 2008 to bring the offical uk cash rates back to 5.25%.

"The Bank's latest forecasts are based on market assumptions that they will cut base rates by 25bp in the first quarter of next year. Indeed, financial markets are now expecting not just one 25bp cut around February 2008, but have also priced in a second cut around May 2008, which would bring official cash rates back to 5.25%."

Like the US, the UK economy has had hard times, and has seen their share of sub-prime mortagae troubles. According to agentcities.net, Chancellor of the Exchequer Alistair Darling has commited to work with the industry on 10, 20 and 25 year fixed rate mortgages.

"the support of the Government for shared equity schemes have helped 95,000 homeowners across the country, to acquire their property, especially after Labour took office"

Mortgage brokers think market conditions are getting worse, according to the Intermediary Mortgage Lenders Association (IMLA).

According to Telegraph.co.uk, the UK has recently seen it's worse housing price slide sine 1996 and consumers are concerned about negative equity.

"The average price of a home in April 2008, dropped 1pc from a year earlier, and by 1.1pc compared with march."

The Telegraph expects that this weakness in the housing market should add pressure to the Bank of England to reduce the UK libor interbank interest rates from their current 5pc level, already .25pc below what the Economist predicted at the end of 2007.

"David Blanchflower, one of the nine people at the central bank who votes on interest rates, warned yesterday that prices could tumble by as much as 30pc in the next two to three years and, that without a sharp reduction in rates, the UK economy risks a recession."

The BoE has cut interest rates 3 times in the past 5 months, but mortgage rates have actually risen by an average of around 1.25pc, no help to home owners watching their prices fall while interest rates are actually rising.

UK Mortgage and Remortgage Deals

2006-09-19T10:58:07-04:00

Mortgage is a way of securing a debt by using your own property as a guarantee to the lender. If For some reason you cannot pay your debt in time you may lose the property. The term mortgage itself refers to the debt and also to the legal device used when securing the property.

In the countries where properties are highly demanded and the prices are quite elevated, there are strong loan and mortgage markets. The UK mortgage market is famous for this reason, it is one of the best in the world, and the competition is very high. The main difference between the UK mortgage market and the ones in other countries is that in the UK the state is not interfering with it and all the loans are funded by banks or credit unions. Also one can find a lot of types of loans in the UK mortgage market.

The UK mortgages are of different interest rates. These rates can be:

-fixed rates - they remain constant for all the period of the loan, usually up to five years because loans with fixed rates that last more than five years are not that popular.

-variable rates - the interest rate of the UK mortgage varies in time, depending on the agreement between the lender and the client

-discount rates - variable rates that benefit of a discount for a period

-capped rates - a mixture between variable rates and fixed rates - the interest rate may vary but cannot raise over a certain fixed limit Furthermore, these UK mortgage rates may also be combined, depending on what the lender and borrower agree on.

Lenders in the UK are usually also asking for a valuation fee, required to pay an observer that must visit the property and evaluate it in order to make sure that it can cover the UK mortgage amount.

Sometimes after taking a remortgage loan you may wish to switch the mortgage to another lender that asks for lower interest rates, so that you can save some money. This is called remortgaging. The UK remortgage market is also very innovative and competitive, almost half of the mortgage applications are in fact for remortgages.

An advice on UK remortgage is to only remortgage your loan if its interest rate drops under 2% under your current interest rate. But the interest rate is not the only thing that should be taken into account when thinking about a UK remortgage. Also consider the amount of time that you plan to live in your home - it has to be enough to cover the costs of the mortgage.

If you want to find out more about UK mortgage and UK remortgage and also find the best deals just follow the links here.

Mortgage Rate Quote UK

What Direction are Mortgage Rates going in the UK?

UK Mortgage and Remortgage Deals