Although the Bank of England is planning a large bailout of banks, consumers with fixed rate mortgages should not get too excited according to analysts. By the time the benefits trickle down to the actual consumers, it may be too late to help them with the rising fixed rate mortgage interest rates. Many had been hoping that they would be able to get the same rates that they did a few years ago, back when their fixed rate mortgages were affordable. However, now that many of these loans have converted to flexible loans, the rates have gone sky high. Michael Coogan, the director general of the CML, said: “The improved liquidity is unlikely to reverse the trend to higher mortgage costs we have seen in recent weeks.”A CML spokeswoman added: “In theory it should have a beneficial impact but it could take quite a while. Clearly there are other considerations such as the cooling housing market. You can’t expect rates to get back to the competitive pricing we saw before the credit crisis. We see the calls from the Chancellor to reduce rates as an aspiration. We cannot provide some kind of cast iron commitment.”
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