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Mortgage Rate Hike |
Article Submitted by: Catherine White
Thursday, 02 July 2009
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It has been revealed that the cost of tracker Mortgages has increased during May, as lenders hiked the margins they charge on deals. According to the Bank of England, a new investigation found that the average interest rate on a tracker loan for someone with a 25% deposit increased to 3.99% during the month, which is up from 3.86% in April. The jump in rates came despite the Bank of England's base rate being kept on hold. Also the key inter-bank lending rate three month sterling Libor, plummeted from 1.45% at the end of April to 1.28% at the end of May. Lenders also increased the rates that they charge on five-year fixed rate deals for people borrowing 75% of their home's value, with these increasing to an average of 4.92% during the month, up from 4.87% in April. Light at the end of the tunnel However, there is still light at the end of the property tunnel. Borrowers taking out a two-year fixed rate mortgage, with interest charged, have seen these Loans ease slightly to 3.97%, which is the lowest rate since July 2003 and down from 4.02% during the previous month. Vicky Redwood, a UK economist said: "The latest Bank of England data on the interest rates charged on new lending to households, suggest that banks are still failing to pass on any recent drops in their funding costs. "The average quoted interest rate on a new tracker mortgage rose by 13 base points in May, despite the fact that three month Libor rates have been on a steady downward trend. "The only consolation was that rates on new fixed rate mortgages remained broadly steady, despite the recent slight pick-up in swap rates. "Nonetheless, even this hardly suggests that banks are falling over themselves to encourage households to borrow from them." Recent figures from a financial information group revealed that the margins lenders are charging on tracker mortgages have reached their highest level since the credit crunch first began. Home alone As the recession deepens, many families are feeling alone as more and more plunge into Debt, as they are no longer able to afford their mortgages due to the rate increase. Research has shown that around 166,000 households are now struggling or falling behind with their repayments. And as unemployment rises, another 260,000 homeowners fear they will be unable to meet payments. A survey focusing on homeowner's who were falling behind on their payments, exposed that a fifth of property owners stated that their lender had not been in contact. Of those who were contacted by their lender, 38% said their lender's willingness to renegotiate a new payment plan was poor. Sam Younger, chief executive of the housing charity Shelter, said: "These figures paint a very depressing picture of thousands of homeowners across the country struggling to keep up with their mortgage repayments, with many more losing the roof over their head." Separate figures from the Ministry of Justice showed that the number of people seeking bankruptcy soared by nearly a third in the first three months of the year, compared to the first quarter of last year. Article Source: http://www.ArticleBlast.com |
About The Author:
If you have or are after a mortgage or if you need Debt advice, check out how Only Finance can help.
Legal and Financial Writer
http://www.onlyfinance.com/debt/
http://www.onlyfinance.com/
If you have or are after a mortgage or if you need Debt advice, check out how Only Finance can help.
Legal and Financial Writer
http://www.onlyfinance.com/debt/
http://www.onlyfinance.com/
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