Mortgage Rates Drop After July High
Thursday, August 7, 2008 17:18
The fixed rates are largely determined by swap rates, at which lenders can borrow from the wholesale money markets. During the credit crunch, swap rates have increased dramatically, making it more expensive for lenders to raise funds. But in recent weeks, these rates have been falling.
As a result, Halifax, C&G, Nationwide, Abbey, HSBC and the Bank of Scotland have recently all cut their fixed rates. According to the report on Moneyfacts.co.uk, a financial information website, the fixed rates have down from the highest peak of 7.08 per cent on July 11. On August 1, 2006, the average two-year fixed-rate was only 5.21 per cent. Now, the average two-year fixed rate from one of the five largest lenders—Halifax, C&G, Abbey, Nationwide and HSBC, is 6.45 per cent. However, the mortgage rates are still higher than two years ago
According to Mr Cook, “two-year swap rates are continuing to fall and yesterday’s closing price of 5.66 per cent is the lowest since mid-May. If these downward trends continue, we will see further fixed-rate cuts.”
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