What will happen next with mortgage best rates?
Mortgage best rates have inched up after hitting record low levels at the end of summer 2011. With warnings of a fresh credit crunch borrowers are advised to make any mortgage product switch soon.
Lenders fresh fears over banks liquidity in the face of the eurozone crisis has bumped up money market funding costs which has fed through to a slight rise in mortgage best rates. This comes despite an interest rate rise being a long way off.
The best deals still remain historically cheap though and borrowers angling for a remortgage should consider snapping a deal up soon. Those on standard variable rates of 4 per cent and above who have equity in their home could consider moving to a fee-free, early repayment, life-time tracker.
Generally, a rise in Libor or swap rates will push up mortgage costs and a fall will allow lenders to cut them. However, at the moment mortgage lenders levels of confidence and their access to funding are equally important to mortgage best rates.
Currently lenders are demanding big deposits and high margins on mortgages which are way above money market rates. If confidence increases in the economy, banking sector and outlook for house prices, then lenders will find it easier to raise funding and borrowers can expect rates to come down and deposit requirements to ease.
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