Moneyfacts article on margins was silly and misleading
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The article in which Moneyfacts says the margin between mortgage rates and the cost of funding to lenders through the swap rate market stands at an all-time high is silly.
Even a basic grasp of economics teaches us that when demand outstrips supply then prices increase.
At the moment demand for loans is greater than the ability to supply so margins will increase.
Moneyfacts continues to tread a ridiculous path where it wants to be seen as a consumer champion while continuing to mislead the public.
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Readers' comments (1)
Anonymous | 1 Sep 2010 9:11 am
If the above basic economic principles of supply and demand are real and are applied, then that would be defined as profiteering. All other things do not remain equal and Adrian Coles from the BSA has given a much better explanation to margins in his feature titled ‘More to interest rate margins than appears to be the case at first sight’
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