11
Sep
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.
