Mortgage rates 'seem obscene' compared to the base rate
www.moneynews.co.uk > Mortgages > Mortgage rates 'seem obscene' compared to the base rate
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Mortgage rates 'seem obscene' compared to the base rate
Tue 15th Sep 2009
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Paul Holmes, chief executive officer of first-time buyer advisor Firstrung, claimed that in order to get the best rate of interest, people need to have a deposit worth 40 per cent of the value of their house, which is uncommon.
He pointed out that some lenders such as Yorkshire Bank are offering 95 per cent loan-to-value mortgages, but that the interest they will charge can be up to twelve times the Bank of England's base rate.
"The flipside is that you could argue that £700 as a first-time buyer for every £100,000 borrowed is not bad, but it is very bad in relation to, in truth, where the economy is," he added.
Mr Holmes stated that lenders are charging these high interest rates because they need to make enough profit so that they can pay back loans and end their government's ownership of their shares.
Research by Countrywide Mortgage Services released this week indicated that the most popular mortgage product was at ten per cent loan-to-value.
Click here for more mortgage news
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