Cost of borrowing remains the same for mortgage holders

11 December 2009

Written by Jeni Browne

Buy to let mortgage holders and other home loan customers saw the cost of borrowing remain the same yesterday (December 10th).

The Bank of England's monetary policy committee (MPC) opted to keep interest rates at 0.5 per cent, meaning it has now been frozen at this record low level for nine months.

It was back in March 2009 when the MPC first set the base rate at half a percentage point.

In response to the decision, the Association of Mortgage Intermediaries (AMI) said that the government needs to encourage more liquidity in the mortgage market before it increases the cost of borrowing in the future.

Robert Sinclair, director of the AMI, commented: "Since the last review there has been no change to leading economic indicators. It is therefore not a surprise that rates remain unchanged."

He added that "lenders remain capital and liquidity constrained" and something needs to be done to address this situation.

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