The statistics from Moneyfacts show that the average two-year fixed rate mortgage climbed to 5.18 per cent while swap rates – which lenders use to help price their fixed rate mortgages – stood at 2.04 per cent on Tuesday.
It brings the margin between the cost of bank lending and average fixed rates to 3.14 per cent, the widest since Moneyfacts\’ records began in 1988.
Excellent on two counts.
1) A newspaper is finally using the correct rates to talk about the rates on fixed rate mortgages. What base is matters not: it\’s the cost of two year money which underpins the cost of a two year fixed rate mortgage.
2) Bank profits are rising. We like this, for we most certainly do not like it when they\’re not making profits and are falling over like ninepins.
Indeed, the only way that we\’re going to get back however many trillions it was is if the banks do indeed make good profits and thus have the cash to pay back those trillions.