Market Rates 11 May 2012

Since the last newsletter inJanuary, Swap rates have bumped up and down and overall increased marginally.

  • 1-year money is up 0.02% at 1.03%
  • 2-year money is up 0.08% at 1.34%
  • 3-year money is up 0.12% at 1.43%
  • 5-year money is up 0.09% at 1.66%
  • 3-month Libor remains at 1.01%

 

Swap rates, when referred to in relation to mortgages, are the cost of raising fixed term funding on the money markets.

They reflect the market's expectation of what will happen to interest rates in the future and the most commonly referred to are two, five and ten year swap rates.

Swap rates heavily influence the cost of fixed rate mortgages and can be substantially higher than the Bank of England base rate or Libor (London Inter Bank Offered Rate). Libor does have an effect on swap rates, but swaps are, in the main, driven by the market and what traders expect to happen to rates over a given period of time in the future. Effectively swaps take a longer term view while Libor is a shorter term measure.

Rate Basket - 14 May 2012

Although Swap rates have remained level and 3-month Libor has decreased, lender rates have increased, on average, by almost 0.25% since January. Both fixed and tracker rates have increased.

rate_basket

Protect Your Credit Record - A Parent's Tale, 29/09/2010

Wednesday, 29 September 2010 00:00 Written by Trevor Irons

As parents, we all do what we can to help our children and when they have difficulty obtaining credit or getting a mobile-phone contract. we often take them on in our own name.

A word of warning however. If payments are late or the agreement goes into default, it is your credit record that is affected. Recently I had a case where a couple found it impossible to get the mortgage that they wanted because, unknown to them, their son had defaulted on his mobile-phone contract. Although they repaid the outstanding amount, the entry will remain on their credit record for 6 years.

So, by all means help your children, but make sure you have some level of control to ensure that the contractual payments are met on time.  

In the current lending climate no one can afford to have blemishes on their credit records.

  • YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
    Whilst MortgageAbility does not charge for mortgage advice, please note that there will be an administration fee for arranging mortgages. The precise amount will depend upon your circumstances but we estimate it will be £295, payable on completion. MortgageAbility gives you the option to pay a non-refundable fee of 1% of the mortgage loan payable with the application. If this option is taken, MortgageAbility will refund any commission received from the lender.

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