Further rate cuts needed, says broker

Mortgage broker John Charcol has called for further cuts to the base rate of interest following this month's vote to take the cost of borrowing to five per cent.

The organisation's Ray Boulger said that the quarter-point cut was the minimum expected by most commentators and noted that further cutes would be needed if the mortgage market is to recover from recent turmoil.

Residential and commercial mortgage borrowers were advised to consider fixed-rate products, as these have not been hit as substantially as variable rates by recent product alterations.

However, he pointed out that tracker rates are likely to offer better value if the base rate falls below 4.75 per cent.

Mr Boulger said that he did not expect the housing market downturn to have the same impact as the recession in the 1990s.

"Confidence is the most important factor influencing house prices and the two most important factors influencing confidence are interest rates and the level of unemployment," he said.

The total number of buy-to-let commercial mortgages and residential mortgages available fell by 40 per cent in the last quarter of 2007, Moneyfacts research found.

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