LIBOR still dropping...

A question about : LIBOR still dropping...

There has been a bit of mild panic about good fixed rates drying up over the last week or two and I can't really see why.

It looks to me like the LIBOR is still dropping day by day, the economy is nowhere near recovery and we're probably not really seeing the full effects of the quantitative easing yet. Other than banks trying to push the idea of the best fixed rates disappearing...grab them quick, is there really any hard data to justify this idea?

RG

Best answers:

• I beg to differ, as a person who is currently going through a purchase now I can honestly say that the market seems to be recovering.
• Swap rates are down since last week.
  The end of the cheap fixed rates is probably not nigh!
• I agree with dunamis totally. There is alot of panic on this site, and although fixed rates might rise slightly in the very short term, there will be extremely goods rates available when libor gets back to a more normal level, when the housing market really begins to pick up again and when banks really begin to compete for business.
  If you have equity issues and are coming off a deal at present (or sitting on a SVR) it might be time to consider a fixed rate. But if you miss this boat, or have a lot of equity in your property, you really do not need to panic.
  I saw a lot of people panic last year when mortgage rates where rising on a daily basis, even though it was quite clear that the country would enter recession. These are the same people who are gutted now that they didn't take a tracker.
  Base rate is 0.5%. We are in recession. There are no real tangible 'green shoots' (I hate that overused phrase). Rates will go up eventually, of course they will. But knee-jerk reaction to every snippet of information of which we have so much of these days will not help.
  Draw breath and consider carefully. Do not be panicked.
  Foreversummer
• Reassuring words foreversummer. I hope your right. Doesnt stop me worrying though!
• Please don't take this as a personal attack Michael1983l but I am almost sure that its the tip of the iceberg.
  Every week a company somewhere in my area closes down - and I dont mean small start up businesses but larger established firms that I have known off for many years.
  I admit to being a pessimist at heart ;-( but I honestly believe most people do not realise just how bad things are going to get and the notion that to get out of debt then you should spend more money, which seems to me is the general political opinion, is absurd. It may ease the pain but we are going to have to pay for it eventually.
  But I am no expert either - just some over-opinionated guy on a forum.
• The market seems to have picked up round here (Essex) at the lower end, I have hopefully sold and have just lost a few places I wanted to FTB's.
• swap rates have been up and down this last week or so - which, for me means that the banks have about as much idea as we do as to the future...
  All I do know is - that the margins that banks used to lend on are never going to be as low as previously. All these people saying that there should be deals at 2-2.5% over base IMO are way off, as with increased regulation, and less overall risk in the markets - margins will be nearer 3-3.5%, more like we're seeing. I think the rate market has all but bottomed out.
• my mum is trying to buy a house and the nice ones that are appropriately priced are going under offer sometimes even before she gets to view them! I've told her not to panic though, if we've hit the bottom, recovery is going to be slow.
• Libors may be dropping a point or 2 each day, but 3mth LIBOR is still a whopping 111pts over the BOE base rate!
  This time 1 year ago, it was around a more respectable 50pts over (even though the base rate was 5.25 % - remember those days??)
• I can confirm in my area FTBs are booming too. I know this is not a story the press will want to run with because its not doom and gloom but I honestly think that the ecconomy isn't as bad as being made out. Unemployment is high, but that goes through cycles. My only concern is labours policy of lending their way out of debt. Thats rule number 1 not to do according to Martin Lewis.
• Rates aint goin high any time soon.
  The BoE arent going to risk any upward moves until there are clear signs of a recovery. In my opinion there is a long way to go before a recovery even starts.
  With regard to low Fixes...where are they? or where were they? There were a few half decent with large LTVs but in comparison to the present BoE base they were hardly what you could call good. Rates could be low for a considerable time, so a decent fix would be 3 % to 3.75 for 5 years. The 2 to 3 year deals are not in my opinion to be described as good.