LONDON (MNI) – The Bank of England’s latest Quoted Rates survey
shows a wide range of mortgage rates edged higher in December.
The BOE’s lenders survey found the average monthly interest rate on
a tracker mortgage, which is linked to Bank Rate, edged up to 3.51% from
3.5% in November. A three year fixed 75% Loan To Value mortgage rose to
4.16% from 4.15% and a five year 75% LTV fixed rate mortgage saw the
rate rise to 4.75% from 4.73%.
Although the change in rates on the month is marginal, the
direction is important since this is the first monthly rate increase
observed in many categories of mortgages since July.
The change in direction follows the change in tone from the BOE
Monetary Policy Committee. The MPC turned more hawkish at its December
meeting and implied market rate expectations rose in December.
Mortgage demand has been weak, and house prices have been falling,
and the increasing cost of mortgage finance will add to housing market
pressures.
One mortgage range which bucked the trend was the sterling two year
fixed 75% LTV, which in December saw the rate fall from 3.53% to 3.49%.
–London Bureau; Tel: +44207862 7491; email: drobinson@marketnews.com
[TOPICS: MABDS$,M$B$$$]
