Mortgage Genie - SWAP Rates, have you ever wondered what they are? 

Interest rate SWAP explained

A SWAP rate is a financial contract used by lenders to secure fixed priced funding for a specific period of time. This can be on any time frame from 1 year to 30 years, although 2, 3, 5 and 10 year SWAP rates are most commonly used as these allow lenders to create fixed rate mortgage products for homeowners, property investors and commercial mortgages. Lender will apply their margin on to the rates below.

Reference to UK SWAP Rates often appear in the media. SWAP rates are used in some quarters as an indicator of the next likely move in fixed rate mortgages available to homeowners. If the SWAP rates are falling, this can be an indicator that the next set of fixed rate mortgage offered by lenders could be priced lower. The reverse is also true! As with any market where a product is traded, the experts can sometimes “make the wrong call” and a swift reversal can take place. 

For a more in depth explanation of SWAP rates, please visit the Council of Mortgage Lenders website here. 

Immediate SWAP Rate drop following Brexit vote

SWAP Rate movements since 01 August 2014

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