12 November 2010

Market leading rates for a very limited time!

With Bank Base Rate held for the 20th month at a record low of 0.50%, the question on everyone’s lips continues to be, when it will it rise? We all believe it will, but have no idea when. Many pundits are suggesting that the BBR will now stay low for at least 12 months. However, a few, believe it will rise much sooner and even one of the Monetary Policy Committee has pushed consistently for a raise over the last few months, although they were out-voted by other members. So, the real conundrum in the run up to Christmas and New Year remains…to fix or not to fix?

We are seeing some really competitive rates being offered and some lenders are even providing market leading products with minimal costs for a mere number of days – fire sales! Two lenders recently launched fantastic products only available for a period of 8 days! This causes mayhem and pandemonium within the industry as intermediaries race to submit customer’s applications in time to meet the deadlines and secure these rates.

The BBR being held is good news for anyone with a mortgage on a base rate tracker or discounted rate facility. Bad news for savers though and particularly those who geared their investments and savings to provide for them in retirement. It is hard to know how this can be overcome as the only route for better savings income is higher rates. It is a Catch 22 situation!

This week sees the great and the mighty of the mortgage industry meeting together at Olympia 2 for Mortgage Business Expo 2010. This two day event consists of lenders and ancillary businesses showing their wares and seeking to establish increased business relationships and volumes. The Financial Services Authority will be there and they will be presenting their report on the forthcoming Mortgage Market Review. This is their latest initiative designed to provide the consumer with yet greater protection and more qualified advice and choice. I suspect that the presentation will be 'lively' as not all in the profession, particularly those who are set in their ways, are happy with the changes proposed. Watch this space!

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