Mortgage lenders could be profiteering
Wed, 12 Aug 2009
Despite interest rates remaining at a historically low rate of 0.5%, mortgage lenders are continuing to raise rates. Although it flies in the face of Bank of England desires and expectations, the mortgage rates paid by normal borrowers have not come down.
Typically, banks and other mortgage lenders would charge a percentage point or two above base interest rate . Since the start of the credit crunch and the collapse of the sub-prime mortgage lending industry, lenders have increasingly dissociated their mortgage rates from base rate.
Now, the Monetary Policy Committee have decided to extend quantitative easing, pumping billions more pounds into the UK economy in the hope of restarting mortgage lending for the average borrower. The charge of profiteering remains uncertain, but many experts are concerned by bank activities in the most recent period of recession.