Variable or fixed mortgage rate?

Variable or fixed mortgage rate?

Yesterday, I had a chance to use economics in a  practical way. My previous fixed rate mortgage deal came to an end. This means the bank would return my mortgage rate to the Standard variable rate, which is currently 4.99% (4.49% points above the base rate). (monthly payments of £703) The first and most important thing is always to ring up and bank and see if they have any better deals than their standard variable rate. Invariably, the standard variable rate is not the best deal. It took nearly an…


Bailout for Mortgage Companies

Yesterday, the bank of England  offered a scheme to bailout the banking sector by offering to exchange ‘unpopular’ mortgage debt for government backed securities. The money markets have struggled since last summer and the American subprime crisis. This has led to a shortage of funds for mortgages and increased cost of mortgages. I wrote an in depth analysis here: – Bank of England Bailout for Mortgage companies. It is not certain how successful it is going to be. Abbey announced this morning that they will increase their mortgage rates anyway.