The announcement that CPI has fallen to 4.5% leads me to believe that rates will be cut further in December and I wouldn't be surprised at all if the Bank of England slashes a further 1% off Base Rate before the year is out.
While the spread between LIBOR and Base Rate remains wide (3m LIBOR currently stands at 4.15%), mortgage rates will be slow to follow suit although we are starting to see some improved pricing in residential mortgage rates.
We have seen a couple of lenders this week launch fixed rate mortgages at 3.99% and tracker rate mortgages are available from 4.39%.
Buy to Let mortgage rates will be slower to return and it may not be until early next year when confidence returns to the money markets and lenders set their targets for lending in 2009.
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