Haringey Lib Dems say mortgage lenders are treating families as “cash cows” and urge Labour to “stand up for struggling mortgage holders”

Cllr Luke Cawley-Harrison, the Liberal Democrat Leader on Haringey Council, has accused mortgage lenders of treating homeowners as “cash cows”, with mortgage rates failing to fall in line with interest rates.

It comes after House of Commons Library research, commissioned by the Liberal Democrats, found mortgage rates have fallen at a significantly slower rate than the fall in the Bank of England base interest rate over the past year, costing homeowners over £1,000 a year.

It means that for new mortgages the estimated average monthly payment has fallen by just £90 a month to £1,189 from £1,279 for two year fixed rates and by only £26 a month from £1,204 to £1,178 for five year fixed rates.

The Library’s research revealed that if instead two and five-year fixed mortgage rates had fallen by 19%, in line with the base rate, then homeowners would be paying a further £41 and £87 a month less respectively. It means that mortgage holders would be saving £492 a year on a two year fixed rate and £1,044 a year on a five year fixed rate mortgage.

Cllr Cawley-Harrison said that Rachel Reeves has to “stand up for struggling mortgage holders in Haringey” and has called on the Labour Government to reverse the Conservative Party’s tax cuts for the big banks as they see billions in profits from eye-watering mortgage rates.

Cllr Luke Cawley-Harrison, Liberal Democrat Leader on Haringey Council, said: 
“It’s really disappointing to see that hard-working homeowners across Haringey and beyond are being used as cash cows by big banks while this Labour Government does nothing to help them.

“The Government has only made the cost-of-living crisis worse. From their jobs tax, to sky-high energy bills, to mortgages, people are worse off under this Labour Government and are not seeing the change that was promised last year.

“The Chancellor must stand up for struggling mortgage holders in Haringey, and she can start by reversing the Conservative Party’s unfair tax cuts for the big banks, who are making billions in profit off the back of sky high mortgage rates.”

Notes:

• The research by the House of Commons Library can be found here.
  
  Notes from the Library: 
  The alternative scenario sees rates fall by 19%, in line with the change in the Bank of England base rate. Please note that mortgage rates are also influenced by other factors beyond the base rate, in particular changes in expectations of where rates are heading. 

  The Library has used a mean average figure for the mortgage advance. This is likely to be above the typical (median) amount, as it will be distorted by a relatively small number of high values. This will increase the monthly mortgage payment values beyond what might be typical. 

  Calculation of average monthly mortgage is approximate, based on a repayment mortgage at the rate, term and length specified with no associated fees. 

  Further information on the Liberal Democrats proposals to cut energy bills in half by 2035 can be found here