Under the headline: Mortgage rate fears to cool market: Fitch, an article from the Business Desk (Northern Advocate, 16.01.15) based on the predictions of the rating agency, Fitch, states that "Fitch anticipates that housing affordability for new loans will get worse in 2015 as the increase in prices and higher interest rates takes up a larger portion of households' disposable income".
The article concludes with the statement: "... lenders have already cut some mortgage rates this year in anticipation of renewed interest in the property market."
I'm not an economist, but isn't it more likely that lenders have cut mortgage rates in order to stimulate interest in the property market, rather than in anticipation of renewed interest.
If housing affordability for new loans gets worse, people won't borrow money to buy houses, therefore, if lenders want to stay in business, they will need to cut mortgage rates to attract new borrowers.
Trish Fenton
Kamo