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Lenders to be cross-examined by MPs on rising mortgage rates today

  • 11/07/2023
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Lenders to be cross-examined by MPs on rising mortgage rates today
The cross-party Treasury Committee is questioning select mortgage lenders today on the impact of rising mortgage rates on the market.

Oral evidence will be given by Andrew Asaam, homes director at Lloyds Banking Group, Charlotte Harrison, interim CEO of home financing at Skipton Building Society, Santander UK’s mortgage director Bradley Fordham, home commercial director at Nationwide Henry Jordan and Paragon’s chief executive Nigel Terrington.

The session starts at 10:15 am and will examine the “current state of the mortgage market, including levels of mortgage stress, arrears and forbearance, and the outlook for the market in light of higher interest rates”.

It will also ask lenders about consumer behaviour following recent rate rises, its consequent impact on house [prices, the wider housing market, mortgage affordability and availability.

The session will also discuss government support schemes, the recently agreed mortgage charter, along with the buy-to-let and rental market and the take-up of long-term fixed rate deals.

The mortgage market has been under scrutiny in the last few weeks as inflation, interest rate rises and economic volatility have led to mortgage rates increasing dramatically.

According to Moneyfacts, the average two-year fixed residential mortgage rate today is 6.66 per cent, which is from 6.63 per cent on the prior working day.

The average five-year fixed residential mortgage rate today is 6.17 per cent. This is up from an average rate of 6.13 per cent on the previous working day.

There are currently 4,344 residential mortgage products available. This is down from a total of 4,631 the work day before.

The government launched a charter, which 85 per cent of the market has signed, which lays out support that lenders should offer borrowers.

This includes allowing borrowers to contact lenders for help without impacting their credit file, allowing borrowers who are up to date with payments to switch to a new mortgage when their fixed term ends without an affordability check.

There is also commitment to offer more information before rates end and support like the ability to extend mortgage terms, switching to interest-only or temporarily deferring payments.

The Labour Party is also hosting an emergency summit on this issue this week with brokers to discuss the mortgage market.

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