It comes as Ulster Bank reduced one of its key variable rates, and Bank of Ireland reversed mortgage rate increases it announced at the start of the year. Permanent TSB CEO Jeremy Masding hinted strongly the bank will cut the interest on some variable rate mortgages. He also admitted tracker customers could also see a cut as there is now a prospect the European Central Bank will drop its key refinancing rate to a minus figure. The bank chief would not be drawn on the specifics of a variable rate cut, but said it could go ahead even if the ECB cuts its main refinancing rate below zero for the first time. Permanent TSB has one of the highest variable rates at 4.16pc. An ECB cut below zero, which is now seen as a realistic prospect, would be passed on to tracker customers, Mr Masding said. The average tracker interest rate is 1.28pc at Permanent TSB and trackers make up the bulk of its lending. A negative ECB refinancing rate would be an issue across the entire Irish banking system, not … [Read more...] about Mortgage rate cuts ‘on the way’ for PTSB customers
Refinance 30 year mortgage
Mortgage applications in the United States dropped last week even though mortgages rates remained lower, Mortgage Bankers Association (MBA) said on Wednesday. For the week ending April 26, MBA’s market composite index, a measure of mortgage loan application volume, dropped 4.3 percent from one week earlier. The drop in mortgage applications came despite lower mortgage rates, which could have led to an increase in application volume. “Mortgage rates were lower last week, with the 30-year fixed rate declining to 4.42 percent, as concerns over global growth, particularly in Germany, outweighed more positive domestic news on first quarter GDP growth and business investment,” said Joel Kan, associate vice president of economic and industry forecasting of MBA. The U.S. Federal Home Loan Mortgage Corporation, said on Monday the 30-year fixed-rate mortgage is expected to average 4.3 percent for 2019, which is below last year’s average of 4.6 percent. MBA’s data … [Read more...] about Mortgage applications in the United States dropped last week
Mortgage applications in the United States increased as mortgage rate continued its downward pattern, according to a report from the Mortgage Bankers Association (MBA) on Wednesday. For the week ending May 17, MBA’s market composite index, a measure of mortgage loan application volume, rose 2.4 percent from a week earlier. However, MBA’s purchase index before seasonally adjustment dropped 3 percent from the previous week. After removing the influences of predictable seasonal patterns, the seasonally adjusted purchase index dropped 2 percent from one week earlier, according to MBA. “Purchase activity declined again, but remained around 7 percent higher than a year ago,” said Joel Kan, associate vice president of economic and industry forecasting of MBA. “Mortgage rates fell for the fourth straight week, with the 30-year fixed rate mortgage hitting its lowest level since January 2018, leading to a rebound in refinances,” said Kan. The refinance index, … [Read more...] about Mortgage applications edge up in U.S. housing market
The US economy is cranking out robust figures 10 years after the start of the global financial crisis: strong growth, historically low unemployment, a soaring stock market. But with the good news come rising interest rates as the Federal Reserve -- which on Wednesday is expected to raise the key lending rate for the third time this year -- tries to keep the economy from overheating. And after a decade of very low rates that enticed many to load up on debt, rising borrowing costs can expose hidden risks lurking in the US and world economies. So where are they? - Mortgages? Not this time - Unlike the runup to 2008, this time mortgages are not expected to be the root of the next crisis. While US home loans continue to form the large bulk (68 percent) of household debt, and totaled $9 trillion through June 30, according to the New York Federal Reserve Bank, they are much healthier now. The share of loans going to homebuyers with low credit scores is very small, and the delinquency rate on … [Read more...] about Do economic risks lurk as US interest rates rise?
CDS manipulation?Here’s a hypothetical situation for you. Let’s say Company X is in bad shape: It has a lot of debt, its business isn’t doing great, and it is running out of cash. It is likely to default on its debt in the next few months. In desperation, it sounds out financing options, but no one is all that keen to lend it any more money since there is no clear path to getting paid back. Credit-default swaps on Company X trade at distressed levels, say 40 points upfront—you have to pay $40 to insure $100 of debt for one year—reflecting the market’s expectation that default is likely and that recoveries in default would be low. Hedge Fund Y notices that Company X CDS is expensive and starts selling a bunch of it. People keep giving it $40 to insure $100 worth of debt for one year, which they think is a good trade because Company X is in such bad shape. Then, after selling a bunch of CDS, Hedge Fund Y springs its trap. It calls up … [Read more...] about CDS Creativity Is Everywhere