Yorkshire Building Society has said that they are responding to the needs of their consumers, which is why they are offering products with lower payments, perfect for this current credit crisis.

The new lower mortgage rate will be 4.99% however; this comes with a higher fee of 3%, this product has been designed for borrowers who wish to keep their monthly rates down.

Mortgage product manager at Yorkshire, Tom Girling has said “We understand that this mortgage will not suit all borrowers, but it is offered as an option for those who may be finding that their monthly income is stretched to the limit. For borrowers who can afford a little more each month, we have mortgage options with lower fees and no fee products.”

Yorkshire Building Society has also lowered their rates by as much as 0.5% on a rage of their products, from

Yorkshire has also cut rates by as much as 0.5% on a selection of two-year, three-year, five-year and ten-year fixed rates.

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This follows the news that the MPC’s hardline member, Tim Besley, had broken the ranks and demanded a rate rise. He hoped that by doing so would help to bolster credibility, which in turn would help to fight inflation.

This news on this tough stance comes as the CBI’s latest industry survey showed manufacturers grappling with the fiercest cost pressures since 1980. This has now marked the first vote for a rate rise from the nine members from the MPC since June 2007.

This has now increased the threat the Bank of England could introduce rate increases in the future, which will have an effect on borrowing costs.

Do not worry too much though, as many economists still believe that rate will stay at 5 per cent, then hopefully we will see a rate cut.

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Just as the government stepped in to save the two mortgage lenders, home loan rates were almost at their highest levels in five years.

The average interest rate for 30-year fixed-rate mortgages is now 6.71 percent, this is from 6.44 percent.

It seems that the concern in the financial markets about the future of Fannie Mae and Freddie Mac are the major cause of these rate increases, both companies guarantee nearly half of the nation’s $12 trillion mortgage market in the U.S.

Because of the troubles that these lenders are now facing the cost has been past on to consumers through the mortgage markets. If you have a $400,000 loan then you will have to find an extra $71 a month, which is $852 a year.

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According to The British Bankers’ Association (BBA) their members report that just 21,118 home loans for new purchases were approved in June, which is down from 27,499 in May. Looking at June 2007 figures, approved mortgage for new purchases are down by 66.9%.

This is now the lowest figure since the BBA started to collect this data 11 years ago. Many were hoping that the fall in house prices would help house sales, but tougher criteria from mortgage lenders and other changes in the mortgage market has cancelled this out.

Also lower is Remortgaging, the number of loans approved was lower in June than in May. The figures in May were 62,637, in June it was down to 59,637, this is down by 13% than the same time last year.

HM Revenue & Customs have also reported a massive drop a sharp drop in the number of property transactions for June, just 77,000 homes exchanged hands.

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Freddie Mac who are sponsored by the US government are also thinking about selling securities and reducing its dividend, while they prepare to issue $5.5 billion of stock. Matthew Jozoff, JPMorgan Chase & Co. analyst has said in a report last week that the growth in mortgage holdings for Fannie Mae and Freddie Mac will be “weak.”

He also added “This just means much less credit availability for mortgage borrowers, they were teed up to be saviors of the mortgage crisis, but now they’ve got their own capital issues.”

Both the Bush administration and Congress are hoping that both companies will be able to pull the U.S. out of the housing slump, as they purchase mortgage from banks, providing money to make new loans.

Both these companies will have a tough job on their hands as Treasury Secretary Henry Paulson had to try and get Congressional approval last week to extend the credit for both banks.

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This report was carried out by Reading University’s Professor Michael Ball for the Association of Residential Letting Agents.

Ball has estimated that the value of assets in the private rented sector has now reached £500bn; as a result he said that this totally outstrips the total of all privately owned commercial property.

Looking to the future it is assumed that rental growth will continue in the short term, this is some comfort to buy-to-let landlords. They have been facing a huge drop in the values of their properties as house prices have been falling across the country.

Landlords were hoping to get more relief from the Bank of England by lowering the base rate this month, but that did not come. Many believe over the coming months, The Bank of England will have to lower interest rates, so it seems win win for landlords.

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The increase in lending rates now makes Nab the third highest, behind St George who’s whose standard variable loans is 9.67% and ANZ Bank who’s rate is 9.62%.

National Australia Bank has blamed the higher cost of wholesale funding for the recent hike in interest rates. Ahmed Fahour, NAB CEO said ”While this change still does not recoup the full impact of increased wholesale funding costs, we have a responsibility to balance the needs of customers and shareholders.”

To give you an idea of how much extra this 0.15 percent increase will make, say you have a loan for $300,000 loan over 25 years, then you will see a monthly mortgage payment increase of $31.

These rate increases could not come at a worse time, not only are people having to pay more on their mortgage payments, but with increasing fuel and food costs, things are set to get a lot tighter in the average household.

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If you are about to take out a new home loan then you should expect to pay more for your mortgage, as many experts believe that mortgage rate will rise. If you already have a mortgage then you do not need to worry, even if you have one with troubled banks Fannie Mae and Freddie Mac.

The crisis of these two big mortgage lenders could also have an effect on homeowners, as it could lead them to foreclosure. Thousands of homeowners who face an increase in their loan rates will be trying to adjust their finances, in the hope of trying to make the extra payments.

If there was to be an increase in loan rates, then this would not be the ideal solution for a recovery in the housing market. The number of foreclosures has been increasing as potential buyers have been scared away, as they need to put down bigger down payments as well as going through tougher credit checks.

Nancy Trejos, Staff Writer for the Washington Post expects that other forms of loans could go up, such as car and student loans. It seems that the crisis of Fannie Mae and Freddie Mac are going to have long lasting effects, and there seems to be no light at the end of the tunnel.

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Well just two days later I had yet another offer, again I refused as was again too low. Then the agent came back to me and said that she was offering me the asking price, so in just six months I had made £21,000 profit.

Well that year seems like a long time ago; now look at the market, for sale signs just seems to be staying up for what seems like an age. After speaking to many estate agents, they have been saying that the amount of property on their books are getting less and what they do have, are getting much harder to sell.

The worry is many had hoped that the Bank of England would reduce the base rate. If they had done this then we would see mortgage rates go down, and that might have been enough to start getting ourselves out of this mortgage slump.

However; the Bank of England also had inflation to think about, I would not like to make that kind of decision. Many experts believe that this mortgage slump will be around for at least 18-months.

What are your thoughts on this?

Both banks are in a world of pain and most of the worlds media are not shy in letting us all know, some like ourselves have said that the U.S. Government are looking at a number of options, one that would involve them injecting cash into their books.

So if the Government was to step in and help bail out Fannie Mae and Freddie Mac, what kind of things would they be able to do. One suggesting is that the U.S. Treasury Department will offer them a form of guarantee to $1.5 trillion of their debt; however some sources have said that this could extend to $2.3 trillion.

Another popular idea is that the Treasury could offer a direct-investment for around $10 billion for each bank, according to CNN Money; this could be in the form of buying triple-A debt securities directly from their portfolios.

However this would carry a risk, as this would mean that the Government will be putting more mortgage risk on the back of taxpayers, this is an unpopular move and it would only benefit the share holders in the end.