Oddbean new post about login | logout There's a simple fact behind the seeming anomaly of #mortgage rates going down (albeit remaining above what they were last year) & the likely continuance of #interestrates rises from the BoE. If you are a mortgage provider you need to lend money to make money; if your prospective customers don't feel they can afford a mortgage then you either try to screw more money out of your existing borrowers or (because this is tough with so many fixed deals), you reduce your prices!
@43d7c4ea To make a profit you also need to lend at a rate higher than what you have to pay to borrow the money. Mortgages fixed for 5 years are a bet on future interest rates. If those mortgage rates are going down its a prediction that interest rates will fall, by people who are putting their money where their mouths are.
@43d7c4ea I don't understand the way mortgages work in the UK. My colleagues in France get fixed rate mortgages (if they want one) for the entire lifetime of the loan! A colleague remortgaged in around 2014 as his current loan was at well about the then current rates and he was offered the new load at 1.15% over 22 years fixed rate for the whole period. If the French banks can do that, why cannot the British banks do the same? Because they are crooked venal bastards? No, couldn't be that, surely!