7 May

CML comments on mortgaging lenders passing on rate cuts

CML comments on mortgaging lenders passing on rate cuts

The Council of Mortgage Lenders (CML) has responded to the government's call for lenders to pass on the Bank of England's rate cut to their customers by pointing out that around three-quarters of customers have fixed or tracker mortgages.

As such, the rate they pay is set by the contractual terms of the loan.

In addition, the organisation notes that for those borrowers paying a variable rate, "the key determinant is not the Bank rate, but the margin over the lender's cost of funds".

The CML also used its monthly newsletter to praise the Bank of England's decision to introduce measures to encourage greater liquidity in the financial markets last month.

It worked closely with both the Bank and the government on the scheme.

At the time, the CML released a statement describing the move as an "important step to tackle funding market difficulties, helping to bring further stability and confidence to the financial markets".

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