11 Sep

Mortgage rate picture is 'complex'

Mortgage rate picture is 'complex'

Mortgage rates are set with reference to a complex range of factors, not just one or two as some recent commentary has tended to imply, according to the Council of Mortgage Lenders.

Director general Michael Coogan said that it is misleading to look at any individual benchmark rate and assume that the margin between that and the mortgage rate is pure "profit" as some experts have suggested.

His comments follow the decision taken yesterday by the Bank of England's Monetary Policy Committee to maintain interest rates at 0.5 per cent.

"The real picture is not nearly so simple - lenders face a broad range of pressures, both in terms of the cost of funds and the cost of liquidity management and capital," stated Mr Coogan.

He added that this is causing a change in the relationship between benchmark rates and mortgage rates in comparison with the pre-credit crunch era.

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