Mortgage News Mortgage Market May Not See One Point Five Per Cent Rate Cut 2467

Mortgage market may not see 1.5% rate cut

06 November 2008 / by Rebecca Sargent
Despite the fact that the Bank of England has cut the base rate by 1.5 per cent to 3 per cent, experts are warning that the mortgage market may not be affected for the better.

In fact, the Council of Mortgage Lenders (CML) has warned that mortgage lenders may not pass the rate cut on to home owners. In an explanation, the CML stated that:

“The real cost of funds to lenders is determined not by the Bank base rate, but by their own cost of borrowing. And their cost of borrowing depends on what they need to pay savers to attract deposits, as well as how much it costs them to borrow from other banks or the money markets, and the costs of holding capital and sufficient liquidity.”

Written by Editorial Team