According to recent figures consumers in the UK are still paying a fortune to take out a mortgage, even though the swap rates, which are indicative of interest rates on mortgages, have come down slightly. A number of lenders have cut the interest rates on some of their mortgage products over the past couple of weeks, but officials have said that the cost of mortgages is still running high for consumers.

Several months ago the government launched a £50 billion mortgage rescue scheme in order to try and ease the problems in the mortgage markets, but whilst many welcomed the move officials have said that it has still to take effect.

One official from the Council of Mortgage Lenders stated: “Neither the cost nor the availability of wholesale funds has improved for lenders since the Bank of England launched its special liquidity scheme, helpful though that scheme is.”

He added: “This means that cost and availability to customers has not improved either. And this in turn means that consumers are now beginning to give up and demand is falling, with confidence in the housing market falling with it.”

Another industry professional said: “There doesn’t appear to be any let up in the misery for borrowers. Lenders need to start playing the game fairly and pass on the cut in swap rates as quickly as they pass on the increase.”

Many lenders and industry officials have predicted that the situation is set to get worse in the mortgage and housing markets over the coming three months or so, and this means that consumers could still find it expensive and difficult to get mortgage finance.

Recent additions:

• Secured loans – the risks and benefits
• Chancellor warns banks about arrangement fees on mortgages
• House price slump could last several years
• Why you should beware of doorstep lenders
• Five things to look for when getting a loan

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