View more on these topics

Brokers fear mortgage rate rise in Greek exit

Brokers fear mortgage rates could rise by up to 1 per cent if Greece leaves the eurozone.

Greece is set to hold its second elections in under two months on June 17, the result of which is likely to decide if Greece stays in the single currency. This week, Capital Economics predicted a Greek exit could push rates up by around 1 per cent.

The price of UK mortgages has increased steadily since the autumn, when rates dropped to their lowest recorded levels despite Libor falling from a high of 1.09 per cent in February to 1 per cent currently and bank rate staying at a record low of 0.5 per cent.

The average two-year fixed rate has risen from 4.16 per cent last September to 4.66 per cent now, according to

Industry experts feel the wholesale markets could freeze if Greece leaves the euro, resulting in tighter criteria and higher prices.

London & Country associate director of communications David Hollingworth says: “Things will get pretty bad if Greece exits the euro.

Rates are already increasing and I do not see how this trend will change if the single currency breaks up. I think a 1 per cent increase in mortgage rates is feasible.”

Emba group sales and marketing director Mike Fitzgerald says: “Mortgages will be harder to get and will become more expensive if Greece leaves the euro. I would not be surprised to see rates rise by more than 0.5 per cent.”

But John Charcol senior technical manager Ray Boulger says: “I think the change could be fairly modest in the short term – less than 50 basis points – as lenders have had about two years to prepare and price for this.”


Newton’s Harries: Chinese growth is unsustainable

Newton fund manager James Harries has warned against investing in China, warning that the country’s growth model is not sustainable. Recent economic data coming out of China has been disappointing. Average house prices in 70 major Chinese cities fell by 1.2 per cent last month, compared with April 2011, following a 0.7 per cent year-on-year […]

A third of UK insurers fear industry will miss Solvency II deadline

Over a third of UK insurers are worried the industry will miss the new January 2014 Solvency II compliance deadline, according to a survey by Deloitte. Deloitte’s annual Solvency II survey reveals 37 per cent of respondents fear the industry will not be ready for the new rules when the directive comes into force in […]

Rents to keep rising, says RICS

Rents rose further in the three months to April, with 13 per cent more chartered surveyors reporting rises rather than falls in the three months to April. The latest survey from the Royal Institution of Chartered Surveyors shows the growth was largely driven by increasing demand as a net balance of 15 per cent more […]


Regulator responds to ‘day of action’ FSCS campaign

Financial Conduct Authority chief executive designate Martin Wheatley says the regulator is keen to reduce the cost burden of the Financial Services Compensation Scheme, and believes advisers could help flag up potential areas of concern before they arise. The comments were made as part of a letter sent to Informed Choice, which held a day […]

A guide to automatic re-enrolment

Since the introduction of auto-enrolment in 2012, it has been a popular topic in the press. Recent media focus has been geared towards small and micro employers; however attention is set to return to the UK’s largest businesses as they prepare for re-enrolment. Johnson Fleming has produced a useful guide that provides essential information to help you […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm