I’m doing economic project about demand analysis and mortgage interest rest is one of the factor.. but i was trying to search for data about this interest rate for last 15 years (data or graph for last 15 years)… but I always found a quote or 15 years fixed rate, which are not what I am looking for. And I also found out that mortgage interest rest also different depends on each person’s credit, so how I can find data about mortgage interest rate for last 15 years..
Thank you very much.
Asked by:Xanasth
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You can not, because there is no such a rate. What there is, is the bank of England Base rate and the LIBOR (London Inter Bank Lending Overnight Rate). These two rates are the basis that banks use to work out their rate. A mortgage rate would almost always be more expensive.
The base rate is the rate at which the Bank of England will lend money to other banks (they will add some based on the banks own credit rating) so this is the cheapest money banks can lend. The other rate, LIBOR is typically .25 to .5% higher and this is the rate at which banks will lend money to each other overnight to make up some shortfall in their own books (plus a margin depending on the banks own credit rating).
So most banks will be lending money at LIBOR plus a little bit and then lend it out to homeowners. A very good deal would be if they could get cheap money from the Bank of England at the Base rate.
So for your project, I would state that I would use the Average between Base and LIBOR and add a margin of 3% and then look for times where there was a big difference between Base, Libor and Actual Rates or SVR(Standard Variable Rate)
You may be able to get the SVR from say Barclays for the same period and then compare. Barclays SVR is often used in contracts between companies and individuals.
Northern Rock last year had a SVR of 7.9% because they could not borrow money at the low rates and had to pay much more than before, maybe 4% when everyone else was paying less than 3, and because they have to make a profit, their rate went up to 7.9%. They also used this as a strategy to push buyers away because it was so expensive, so that people would take out a mortgage elsewhere where it was cheaper and they get their money back to pay back the government bail out and reduce their mortgage book.
So look for times where there was a difference, such as recently when the Base was 1% but LIBOR stayed at about 5%. Mortgage rates are always higher than LIBOR. LIBOR is used internationally and the USA as the real Base rate.
Good luck