How do lenders really set their rates?
The past few years have seen the relentless rise of the Bank of England base rate dominate lending and borrowing decisions across the mortgage market. This significant uplift has led to an even more complicated picture around affordability, stress testing, the influence of mortgage swap rates and generated a flurry of future interest rate forecasts amid some lingering economic uncertainty. To add some clarity to these shifting market dynamics, the latest episode of Barclays Mortgage Insider Podcast sees host and property expert Phil Spencer joined by Charles Roe, director of mortgages at UK Finance. With a huge number of moving parts involved in the lending and advice process, Charles carefully evaluates the different funding mechanisms, outlines the subtle variations between traditional building society and banking models and explains the impact of Consumer Duty. He also broaches the current Table Mountain interest rate approach as opposed to the more recent Matterhorn effect, emphasises the importance of the relationship between lenders and the intermediary market in generating good outcomes and highlights what brokers should be watching out for in 2024. All of which makes for a detailed and illuminating analysis of past, present and future lending conditions. This episode was recorded on 24th October 2023 prior to the Autumn Statement and the latest Bank of England base rate decision.See omnystudio.com/listener for privacy information.