Subscribe to The Money StopNews Feed

Browse > Home / News, News-Banking / Banks try to recover by making customers pay

Banks try to recover by making customers pay

August 17, 2009 by admin  
Filed under News, News-Banking

Leave a Comment

It has been suggested that many banks and building societies in the UK are trying to rebuild their financial portfolios and profits by making customers pay, according to a recent report.

Figures have shown that whilst the Bank of England base rate has stayed at its lowest level in history, at just 0.5 percent, for a number of months now the cost of borrowing from banks and building societies has continued to rise, increasing the margin between the base rate and borrowing rates.

Industry officials have said that the greatest increase has been seen in mortgage borrowing rates, with a significant rise in fixed rate borrowing costs over the past three months even though there has been no change in the base interest rate. There has also been an increase in credit card interest rates, although this has not been as great as that seen with mortgage interest rates.

One industry official said that there had been a huge increase in the margins seen between the amount that it costs the banks to borrow money and the amount that the banks are then charging consumers to borrow money. She said: “Typically we would have seen a 0.8% margin on top of their product. Now we are seeing a 3.1% margin.”

The Council of Mortgage Lenders has said that amongst the reasons for the higher rates was the fact that borrowers in the current climate were far more likely to default on repayments than previously due to the ongoing recession. In addition to this, it added that lenders were having to use saver deposits to fund mortgage lending due to cash flow problems, which also contributed towards higher rates being charged.

Tags: level, banks, borrowing, margin, change, fixed rate, percent

Tags:

Related Entries

  • 2.5 million accounts hit as banks tighten finances
    • New research has revealed that over 2.5 million credit card customers were either charged a fee, had their credit limits reduced or their accounts closed as banks tried to recover money lost through debts and
  • Banks fleecing customers with overdraft fees
    • It has been revealed in a recent report that many of the UK's banks are fleecing their customers with extortionate overdraft rates and fees despite the fact that many of the customers, as taxpayers, have
  • Bank charge firms to be investigated
    • On the back of current investigations that are being carried out into the charges applied to customers' accounts by banks in the UK by regulatory bodies, a further investigation will now be carried out into
  • House prices could take years to recover according to Bloomberg survey
    • A survey from Bloomberg has suggested that property prices in the UK could take a number of years to recover back to the level that they were at back in 2007, before the credit crunch
  • Keep claiming those bank charges
    • Customers should continue to trying to claim back unauthorised overdraft charges from their banks despite a recent court ruling.Birmingham County Court found in favour of Lloyds TSB in a case against Kevin Berwick in which
  • Banks have paid out £200 million this year
    • According to the latest statistics banks in the UK have already paid out over £200 million this year in the form of repaid bank charges to customers that have made claims for any charged imposed
  • Faster payments possible if consumers change banks
    • The UK Payments Council has recently stated that many banks are still not making same day transfers to accounts at different banks despite the Faster Payments System that was brought in back in 2008, and
  • Banks need to do more to help struggling customers
    • It has been claimed by the Financial Ombudsman Service that banks in the UK need to take more action to help consumers that are in dire straits with their finances and who need help to

Speak Your Mind

Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!