Fixed Rate Mortgages Drying Up
Published / Last Updated on 18/06/2009
Fixed Rate Mortgages Drying Up
There is a trend with lenders currently to withdraw on increase interest rates for fixed rate mortgages.
Swap Rates (i.e. the interest rates at which financial companies lend to each other, and principally driven by fixed interest long term gilt yields) has increased dramatically over the last two months.
As a result, many high street lenders such as Abbey, Lloyds and Nationwide have increased interest rates on fixed rate mortgages by anything between 0.5% and 1.0% pa. This is because fixed rates are the rates that lenders are most exposed to i.e. at risk from, when inter-bank rates increase.
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