Lenders reaction to rate rises
- 14th February 2007
- Buying Property News
With recent interest rate rises, lenders have withdrawn some fixed rate offers.
Andrew Hagger, of Moneyfacts, says: "Lenders are panicking. We have never seen so many fixed rates being pulled so quickly. Even when a rise is expected, it usually takes a week for lenders to respond.
"With a further rate rise still on the cards for 2007, those consumers on a tight budget will need to act quickly before more of the current best buy fixed-rate deals vanish," says Andrew Hagger.
"Just because lenders pulled their fixed-rate mortgages does not mean they ran out of the money," Nick Gardner at Chase de Vere told The Telegraph.
"A lot of lenders probably had a good deal of the tranche of cash left and they will now put it back on the market at higher rates, thereby increasing their profit margins. Lenders might argue that the cost of fixed-rate money has gone up, but re-pricing existing money is a very profitable exercise.
"In the next few days, you will see almost all mainstream under five per cent fixed-rate deals disappear and any that still exist will have whopping arrangement fees attached."
Lenders are panicking. We have never seen so many fixed rates being pulled so quickly.
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