Keep your guard up, borrowers warned

Borrowers in the UK have been warned to keep their guard up in terms of how they manage their finances, it has emerged.

David Kuo from Fool.co.uk has suggested that credit consumers need to remain vigilant to avoid paying higher rates of interest on any money they borrow despite the Bank of England’s efforts aimed at easing the current economic crisis.

Banking groups can now swap their mortgage debts for government-backed bonds but Mr Kuo maintains that consumers should still be looking to improve their debt management efforts.

He said that while the government is looking to nationalise mortgage risk in the financial markets, banks will continue to act in ways that are in the best interest of their shareholders.

“Consequently, borrowers will need to demonstrate that they are good credit risks if they want the best interest rates,” said Mr Kuo.

The housing market looks set to slow considerably in the UK over the course of the next few months, the Council of Mortgage Lenders suggested recently.