The rate at which banks lend to each other has risen to the dizzy heights of December 07.

Millions of UK mortgages are linked to LIBOR interest rates and not the Bank of England set base rates, so even if we have a rate drop, millions of homeowners wont feel the benefit, they may even feel increased financial pain.

Trumpo has tried to attain the exact number of borrowers that are directly linked to LIBOR, but I guess the figures may be too startling. Our lovely regulator, in their wisdom, are trying to deal with the iminent “Payment Shock” consumers about to come out of fixed rate mortgages are about to experience, but how many are going to receive a double shock ? more importantly, I bet over 70% of mortgage payers dont know whether their mortgage is linked to LIBOR base or Bank of England base.

I have a sneeky feeling that somebody does know, but is barred from telling us. One other big question that needs answering, with the dramatic rise in reposessions, are the mortgage products in default linked to LIBOR or Bank of England base rate? Trumpo would take a punt that the lions share are linked to LIBOR.

If anybody knows can they please make comment, we may yet uncover an advice issue, should lenders be selling LIBOR linked mortgages?

Your Trumpo. 

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