Were mortgage rates affected by Barclays' Libor fixing?
How much UK mortgage rates were affected the manipulation of Libor rates may not be clear for some time.
The government will launch an inquiry and in the meantime Barclays has been fined £290 million.
The FSA advise Barclays issued misleading figures to lie about it's true funding costs, this manipulation then influenced Libor rates at which banks lend to each other.
The Libor is the benchmark for setting the price banks borrow at, and between 2005 and 2008 Barclays tried to influence the Libor to boost profits.
Some mortgage rates such those for SVRs, are linked to the Libor and rise and fall in line with its changes.
Even those whose mortgage is not linked to the Libor could have been affected because the Libor is used to decide if mortgages should be made cheaper or more expensive. For example, when SVRs were hiked in quarter 2 this year lenders justified their decision by saying the Libor was rising.
The US Department of Justice are also investigating Barclays and they have said that the manipulation of the Libor could have increased UK mortgage rates. Barclays dismiss this saying that mortgage holders have not been affected
If you feel that your mortgage rate is too high you are advised to contact Deal Direct. We will compare your offer against the most competitive deals available in the market.
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