Britain’s banks are accepting smaller profit margins and bigger risks on UK mortgage lending as stress in sterling money markets stretches into a second week, industry sources said, with appetite to lend greater than worries about higher funding costs. The cost for banks of hedging their mortgage lending via products known as swaps has risen as a spike in UK government borrowing costs to multi-decade highs has kindled fears Britain may struggle to meet its fiscal rules. While investors are demanding bigger returns to hold UK sovereign debt, major banks are for now still willing to lend through the malaise without immediately passing on higher costs to customers seeking home loans, the industry sources said.
Britain’s banks are accepting smaller profit margins and bigger risks on UK mortgage lending as stress in sterling money markets stretches into a second week, industry sources said, with appetite to lend greater than worries about higher funding costs. The cost for banks of hedging their mortgage lending via products known as swaps has risen as a spike in UK government borrowing costs to multi-decade highs has kindled fears Britain may struggle to meet its fiscal rules. While investors are demanding bigger returns to hold UK sovereign debt, major banks are for now still willing to lend through the malaise without immediately passing on higher costs to customers seeking home loans, the industry sources said.
Britain’s banks are accepting smaller profit margins and bigger risks on UK mortgage lending as stress in sterling money markets stretches into a second week, industry sources said, with appetite to lend greater than worries about higher funding costs. The cost for banks of hedging their mortgage lending via products known as swaps has risen as a spike in UK government borrowing costs to multi-decade highs has kindled fears Britain may struggle to meet its fiscal rules. While investors are demanding bigger returns to hold UK sovereign debt, major banks are for now still willing to lend through the malaise without immediately passing on higher costs to customers seeking home loans, the industry sources said.
