John Charcol: Saving rates helping borrowers

The savings market is inadvertently helping borrowers as it is promoting greater mortgage lending, an industry expert has said.

Quoting Moneyfacts 7, which revealed that banks and building societies are offering rates of five per cent or more, Ray Boulger of UK mortgage advisor John Charcol observed that the “relative stability of savings rates has helped to avoid mortgage rates increasing”.

He added that this, coupled with greater competition in the sector, has compelled creditors to cut their margins or risk missing their lending targets.

Commenting on the news from the Monetary Policy Committee that the Bank rate will be unchanged but £25 billion is to be added to the quantitative easing programme, Mr Boulger remarked that “the picture for mortgage borrowers looks a little brighter”.

Earlier this month, TheMotleyFool.co.uk’s director David Kuo noted that quotation searches should be used by lenders to help increase transparency and assuage consumer concerns.

By Sarah Adie