Mortgage lenders were accused of holding back economic recovery in the financial press this weekend, with recent figures revealing that banks are operating on the highest profit margin for 20 years. The Mail on Sunday reported that that the average 2 year tracker is now 3.27% above the Bank of England base rate – a significant rise from the average margin of 1.51% this time last year – and there appears to be little sign of margins narrowing. Experts in the Independent on Sunday argue that lenders are wary of attracting business they cannot cope with, so their failure to pass on a recent drop in swap rates can be attributed to cautious lending rather than simple profiteering. This does not help borrowers with little or no equity suggested the Sunday Telegraph, with the best rates on the market still only available to those with at least a 25% deposit. With a sharp increase in fixed rates and predictions that base rate will remain low for the foreseeable future, tracker rates are becoming a more tempting prospect, and the Guardian, Financial Times and Sunday Times all suggest careful consideration of this as an option. The Sunday Times discussed the ever present issue of green living, following a government announcement that homeowners will be encouraged to create their own power via clean energy cashback systems, under which they would be paid for the power they produce. This will obviously require alterations to many homes, and green loans are already available through lenders such as the Co-Op Bank and Ecology Building Society. Experts suggested however that it may be more prudent to find the best mortgage deal and put any savings to ecological use instead. In savings news, the Sunday Mirror revealed that 22 million savers have no idea what interest rate they are currently paying. The average variable savings rate is now just 0.94%, but there are some very competitive rates on offer and the advice given was to switch to a better deal as soon possible.
What the papers say- 18th and 19th July 2009