• From The BBC:

    The long-term cost of mortgages is likely to rise as lenders continue to resist taking on too much business, brokers say.The cost of funding certain mortgages has fallen but lenders have failed to drop home loans costs in response. The amount banks charge to lend to each other, measured by the Libor rate, has fallen below 1%. An industry body said restoring the stability of the financial system was costing money in the current climate. And brokers said that mortgage rates remained at relatively low levels. Marginal decisionThe rate banks charge when they lend each other money is the London Interbank Offered Rate, or Libor.
    Six months ago, three-month Libor stood at 2.24%, but this had dropped to 0.97% on Thursday. This is used to fund variable rate mortgages – but rates for tracker deals have moved relatively little. Changes to mortgage costs do tend to lag behind moves in Libor. However, the margins between funding and the amounts charged by lenders has widened, according to price co…

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    Posted by Jon @ 3:39 am

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