Mortgage Defaults to Rise
The Bank of England warned yesterday that it is expecting the number of mortgage defaults to rise this year, as over 1 million home owners remortgage this year, facing a 'significant and unanticipated increase' in borrowing.Following the credit crunch of 2007, banks are less likely to pass on interest rate cuts and are charging higher mark-ups on new mortgages.
Over the past 5 years, banks have chraged 0.1% more than the wholesale cost of borrowing monry for two year fixed rate mortgages. In Novemebr 2007, this figure reached 0.6%, meaning a £200k mortgage will cost an extra £1,000 per year.
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