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The Risks of Hedging Your Mortgage Rates
The Bank of England looks at inflation and determines the bank rate. That kind of sets short term guilt yields with a bit of anticipation from the market. And then mortgage rates, look at those interest rate swaps. And again, pricing a bit of credit risk and everything else. So it's like a cake where you've got the risk free rate to the bottom and then you just layer in risks as you go further out.