Current mortgage rates to rise in reaction to the eurozone crisis
Many are warning that current mortgage rates are likely to rise as lenders respond to the Eurozone crisis by raising loan rates. Home-owners may soon find it more difficult to find a good deal. Since the Eurozone crisis, banks and building societies have been hit by an increase in lending costs amid fears of loan defaults.
A spokesman for the Council of Mortgage Lenders acknowledged that the effect on lenders from the Eurozone problems was an increase in wholesale funding costs and a reduction in funding availability. Competition between lenders has so far prevented most of the increased costs from being passed on to borrowers and mortgage deals still remain available however, the position is very finely balanced and lender mortgage increases are not be far away.
Mark Dyason who is the director of the Edinburgh Mortgage Advice commented saying that there is currently less money around which is increasing lending costs. He advised that it is to be expected that lenders fixed rates will soon rise as lenders cannot absorb the increased funding costs indefinitely. He added that tracker mortgages will also increase and he issued a warning to home-owners that those on soon to end deals, will find that current mortgage rates are going up.
According to the CML the number of mortgages have seen a twelve month increase for 2011. Fixed-rate deals were the deal of choice for around two thirds of all mortgage borrowers who made the most of the favorable current mortgage rates offered by lenders.
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