7
May
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".
