On July 9 Bank of England decided to maintain the the current interest rates at .05 level, but the borrowers are paying mortgage rates that are hovering around 8 percent. Now the British banks are accused of "mortgage rip-off" as the current rates are too high compared with the Bank of England interest rates.
In fact, according to a story by Myra Butterworth, published in today's Telegraph, "banks have been accused of exploiting homebuyers by making the highest profits on mortgages for more than 20 years." This is happening today at a time when 1,000 British families a week are being evicted from their homes due to foreclosure.
Shadow Chief Secretary Philip Hammond said: "The Government's policies to re-start lending are failing to help hard-pressed homeowners. "And with Government borrowing at record levels, there is a risk of long term interest rates being forced up still further with a knock on effect on mortgage rates."
The current 5 year fixed mortgage rates in England have been raised by 0.6 per cent to 6.29 per cent. This has happened at the nationalised bank Northern Rock last Friday.
Many analysts and politicians are calling on the government to ensure that the housing market and the mortgage rates move to the right direction to help the people. This is amid a rise in mortgage application fraud, divided opinion on the future of house prices, and predictions of failure of the current plans to prevent foreclosures and fix the housing market.
In U.S. the current mortgage rates have been falling for the past two weeks. However, could this change this week?
Mortgage analyst Allan Efting tweeted this morning that as the Goldman Sachs beat the street, stock futures point higher. Oil prices rebound and Mortgage bonds trade down. He says today's mortgage rates will be higher.
On the other a Canadian Mortgage analyst Brad Campton told us that Goldman's news probably won't have much impact on mortgage rates. Bond yields might be affected slightly, but the banks will not change their mortgage rates.
Let's see how this prediction may turn out as the mortgage rates are released this morning.
Written by Armen Hareyan
Comment and add to the story without registration, but keep the comments meaningful please. Links are not accepted.
