Nationwide's chief economist Martin Gahbauer said lower interest rates had given existing homeowners with tracker or standard variable mortgages a welcome breathing space.
And Europe's housing markets are caught in an unenviable trap because so many households have variable-rate mortgages.
Most Britons, for instance, still have variable-rate mortgages, although the proportion with fixed-rate home loans is rising (thanks, in part, to lower inflation).
That proportion has been climbing sharply in recent years, however, because short-term interest rates (and thus variable-rate mortgages, which follow them) have been so much lower than long-term rates (on which fixed-rate mortgages are based).
In addition, a large increase in early defaults on recently originated subprime variable-rate mortgages casts serious doubt on the adequacy of the underwriting standards for these products, especially those originated over the past year or so.
In Britain, 85% of mortgages are variable-rate, compared with 50% in Germany and 10% in France.
As in Ireland, the interest rates on most of these mortgages are variable, linked to the rates on offer to banks in short-term money markets.
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All were former Abbey customers, who were put on standard variable rate (SVR) mortgages after coming off fixed-rate deals.
Not only have home prices and mortgage debt surged relative to incomes, but most mortgages are at variable interest rates.
They note that 70% of Italian mortgages are at variable rates, higher than the EU average and this in a country where real disposable incomes are shrinking.
And because most British mortgages are at variable interest rates, or are fixed for only a few years, sharp cuts in rates in Britain eased the burden on debtors more than rate cuts did in America, where many more mortgages are at fixed rates.
Traditionally, only about a fifth of new mortgages have been of the variable-rate variety.
Mortgages can come with fixed, variable and adjustable interest rates, and typically offer longer terms of repayment than home equity loans.
Mark Harris, chief executive of mortgage broker SPF Private Clients, explained that most mortgages track a lender's standard variable rate, or the base rate, so most are not directly affected by Libor.
Earlier, in October 2008, the bank had written to some Halifax customers, telling them it would raise the standard variable rate (SVR) 'cap' on their mortgages from 2% above the Bank Rate to 3% above it.
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Some mortgages, car loans, student loans, etc. carry variable rates, but more have fixed rates.
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With the majority of CDOs being backed by mortgages, the principal-only tranche has a known future cash flow, but at a variable rate of return, while the interest-only tranche has both an unknown cash flow and an unknown rate of return on that cash flow.
Fixed-rate mortgages are due to expire for about two million people over the next 18 months, reverting to high variable rates.
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Delinquency rates on variable-interest-rate loans to subprime borrowers, which account for a bit less than 10 percent of all mortgages outstanding, have climbed sharply in recent months.
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