top of page
Search

A day is a long time in the world of mortgages

  • Writer: eddge
    eddge
  • Sep 28, 2022
  • 2 min read

Yesterday. If only all our troubles seemed so far away. It would be fair to say that Tuesday 27th September will not go down in history as one of the best days for mortgage borrowers (and indeed brokers). Lenders were pulling rates, everyone was talking of a major crisis, and people were, quite rightly, panicking.


Well, today (as they say) is another day. And, thankfully, a better one. Because The Bank of England has announced today that it will support the long end of the gilt market and, as a result, gilt prices at the longer end have already rallied strongly. Meaning yields have fallen. Good news for mortgages.


The Bank has stated: "We will carry out temporary purchases of long-dated UK government bonds from 28th September. The purpose of these purchases will be to restore orderly market conditions. The purchases will be carried out on whatever scale is necessary to effect this outcome.”

Of course, prices are still exceptionally volatile but, at the time of writing, gilt yields have fallen today as follows:


2 year: 6bp to 4.50%

5 year: 11bp to 4.56%

10 year: 27bp to 4.23%

30 year: 51bp to 4.46%

This may well reduce the scale of rate increases from lenders who haven't increased rates so far this week. And it should also result in more 10-year fixes having lower rates than 2 or 5 year.

To be clear, this is only a temporary respite as The Bank has said it will continue buying gilts until 14th October. However, it buys some time. And, no doubt having established the principle, it will consider whether further action is needed beyond 14th October.

Finally, it is worth stating that the MPC has also reiterated that it does not plan to increase Bank Rate before its scheduled November meeting.


If you need to talk this through, you know where we are.

 
 
 

Comentarios


eddge

Independent Mortgage Brokers London

Contact

4th Floor

11 Leadenhall Street

London EC3V 1LP

What you need to know

Your home may be repossessed if you do not keep up repayments on a mortgage or any debt secured upon it. A fee of up to 1% of the mortgage amount may be charged, depending on individual circumstances. A typical fee is £450.

+44 (0) 204 519 1266

hello@eddge.co.uk

eddge twitter icon.png
eddge LinkedIn icon.png
eddge FB icon.png
eddge Instagram icon.png
About us

eddge mortgage brokers is an appointed representative of John Charcol Limited which is authorised and regulated by the Financial Conduct Authority. The Financial Services Register number is 665649. Registered in England No. 9157892.

eddge mortgage brokers. Registered office 4th Floor, 11 Leadenhall Street, London, EC3V 1LP. Registered in England Number 11998366.

|

|

© eddge

|

Designed by Fivespoons

bottom of page