Mortgage lenders have been told they need to "pass on interest rate decreases" so that homeowners are not struggling to make repayments on their loans when money may be tight over the next few months.
The Homeowners Advice Centre said that people should be able to benefit from the lower standard variable rate imposed by the government and Bank of England when they lowered the national interest rate.
Al Elliot, an advisor at the Homeowners Advice Centre said mortgage lenders "need to wake up and realise that this period is about consolidation of their outstanding mortgage book, not exploitation and profit chasing".
He believes this would help homeowners, especially first-time buyers, and avoid an increased risk of repossession.
This month, the Council of Mortgage Lenders reported that it expected 45,000 properties to be repossessed in 2008, which is around 0.38 per cent of the 11.74 million mortgages in the UK.
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