Swap rates starting to pick-up

Thursday, December 2nd 2010, 12:07PM

The two year swap rate, which gives a good indication of what it costs banks to fund home loans, has started to pick up. This is at odds with the trend for the rates being offered to borrowers.

In the past few weeks all banks have dropped two year rates.

This fall isn't expected to last for long and rates will start rising in line with swap rates.

Bearing that in mind the recent cuts look like a window of opportunity for borrowers to fix at favourable rates.

Comments from our readers

On 3 December 2010 at 7:20 am Dave said:

I am no economist nor rocket scientist but commonsense tells me from the graph that the banks have enjoyed an increased margin since January 2009 of around 1% over the previous year. The unnamed commentator mentions the current cuts look like a "window of opportunity" - for whom?? - the banks would love the borrowers to lock in at margins of around 3% - their profits and CEO salaries will remain safe.

On 3 December 2010 at 10:22 am Barry said:

I agree. I also am no expert at predicting interest rate increases however I have been "prompted" by banks before and locked into rates that sounded safe at the time. When they dropped the rates I was missing out! I'm floating a little longer.

Swap rates starting to pick-up

Thursday, December 2nd 2010, 12:07PM

Comments from our readers

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