Base rate and mortgage rates not singing from the same hymn sheet

Ben Thompson, Director, Mortgages at Legal & General comments on today's cut in the base rate: "The Bank of England is prescribing the wrong drugs in terms of the mortgage market and it is starting to make this market look more sickly. Today's cut will only help a fortunate few borrowers and it certainly won't help savers or pensioners. Base rate and mortgage rates used to pretty much synchronise and to an extent be predictable, but now they're completely out of tune with each other. Banks need to attract savers more than ever before with the offer of a good return on their funds, but this relaxing policy by the Bank of England is making things worse.

"It is clear that for most people it is availability rather than affordability of lending that is the issue. Discouraging saving is at odds with the needs of the market and we urge the consideration of other measures that will increase the availability of mortgage funds."