Despite the drama on Wall Street with the collapse of Lehman Brothers investment bank, and the subsequent declarations of increasing interest rates from the experts, this last week has seen mortgage interest rates remain surprisingly flat.
In fact, long term fixed rate mortgages even reduced in one or two cases in America, which is normally a sign that the UK mortgage lenders will follow suit. It may simply be that UK mortgage lenders are currently pre-occupied with all the recent takeovers and discussions of mergers and hence are still watching the market to see how the US mortgage banks will react before they make a decision on increasing mortgage interest rates and by how much, so currently we wait and see.
The Libor rate, the rate at which banks lend to one another, has now increased slightly to 6 per cent, which is an indication that general mortgage rates might increase and yesterday, the London Stock Exchange investment news was urging those potential borrowers looking to purchase a property to secure a cheaper mortgage rate now whilst they still could.
Certainly, there are many potential property owners, especially first time buyers, who are watching as the price of property decreases and are keen to get on the property ladder so this might see a small rise in the number of mortgages approved if they can get a deposit together. The market at the moment seems to be a ‘watch and wait’ game.
