Mortgage costs still high for consumers

According to a recent report swap rates, which are indicative of mortgage rates, and have been high for some months, have come down slightly over recent weeks.

However, whilst a number of lenders have cut the interest rates on some of their mortgages, many consumers are still paying over the odds for their mortgage loans, particularly if they do not have a large deposit to put down.

Some officials have said that mortgage interest rate cuts are not being applied on a large enough scale given the drop in swap rates. He said: “There doesn’t appear to be any let up in the misery for borrowers. Lenders need to start playing the game fairly and pass on the cut in swap rates as quickly as they pass on the increase.”

There are concerns that the £50 billion mortgage rescue plan that was launched by the government earlier this year has not yet taken effect in the mortgage markets.

Officials from the Council of Mortgage Lenders recently said: “Neither the cost nor the availability of wholesale funds has improved for lenders since the Bank of England launched its special liquidity scheme, helpful though that scheme is.”

The CML continued: “This means that cost and availability to customers has not improved either. And this in turn means that consumers are now beginning to give up and demand is falling, with confidence in the housing market falling with it.”