Mortgage holders 'losing out' on low interest rates

Date:Friday 5th June 2009
Author: Susanna Kavka

A price comparison site has warned mortgage holders that they may be losing out on historically-low rates of interest because lenders are failing to pass them on. pointed out that while banks have reduced savings rates to an average of 0.58 per cent - a figure near the current base rate of 0.5 per cent - the average standard variable rate on a mortgage product is 4.66 per cent above the base rate.

Calling the move "blatant profiteering", the website's Richard Mason pointed out that it does not benefit existing borrowers or savers.

However, he said homeowners can cut down on their mortgage payments by making sure they have a clean credit history, shopping around for the best deals and checking to see if lenders are willing to offer any flexibility.

This week, the Association of Mortgage Intermediaries urged the government, along with the Bank of England and the treasury, to do more to help first-time buyers secure a mortgage.

Robert Sinclair, the group's chief executive, said that increased competition is needed in the mortgage market to ensure borrowers get the best deals possible.