UK Fixed Mortgage Rates Hit 10 Year High
As we start to see the emergence of part two of the UK credit crunch, fixed mortgage rates have hit a 10 year high with the average deal set at 6.75% for a two year deal and 6.72% for a five year term. The move is yet another reflection of the increasing cost of finance with the £50 billion government asset swap program seemingly having very little impact upon liquidity. Industry insiders believe that sub 6% mortgage rates will soon disappear with rates set to move even higher in the short term.
Those who monitor the markets will be aware that there has been very little comment from the Treasury, the same organisation which only a few weeks ago was patting itself on the back for a job well done. While many seemed to have taken their eye of the markets, assuming that the worst was over, it looks as though rates could edge alarmingly near the highs seen when the credit crunch first hit the UK.
Quite what the authorities or the financial industry can do to reduce the impact of the rising cost of finance is not clear, but there is real concern.
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