Lenders have less need to produce competitive rates this year as thousands of Northern Rock five-year fixed deals come to an end, says The Mortgage Practitioner sole practitioner Danny Lovey.
The mortgage market is currently seeing a lack of appetite for providing competitive fixed rates, despite two-year swap rates falling to 4.82 per cent following December’s base rate reduction to 5.5 per cent.
Lovey says one reason for the lack of competitiveness is that lenders are waiting for the Rock deals to expire. He predicts that 90 per cent of Rock’s five-year fixes due to end in 2008 will be recycled into the rest of the market.
Lovey says: “Lenders do not need to be aggressive at the moment as they know that these deals are going to be rolling out from Northern Rock to them.”
Lovey points out that these mortgages were fixed at rates of around 4 per cent. He says: “It is a done deal that these will roll out to other UK lenders.”
Mortgage analysis, p44