Link between base rate and mortgage rates “severed”
March 8, 2008 by admin
Filed under News, News-Mortgages
An expert has suggested that mortgage rates are no longer influenced by the Bank of England’s base rate of interest.
Melanie Bien, director of Savills Private Finance, said that despite the Bank’s monetary policy committee choosing to maintain the base rate at 5.25 per cent, Abbey has announced its mortgage rates will be rising from next week.
“It proves that the connection between base rate and mortgage rates has been all but severed as lenders look to improve margins rather than market share,” she claimed.
Consequently, even if the base rate comes down further this year, this may not feed through to mortgage products, the expert suggested.
In order to make the most of the best deals currently available, need to “act quickly” before lenders remove them from the market.
Paul Holmes, chief executive officer of Firstrung, said that people are unlikely to be able to take out 100 per cent-plus mortgages any more.
However, despite some people criticising such products, Mr Holmes said that they were “very good” in some circumstances.
