Borrowers urged to remain vigilant

Paymentcare.co.uk is warning borrowers against becoming complacent about potential rate cuts by lenders.

The payment protection insurance website says any cut could provide only short-term relief, as recent analysis forecasts up to 11,000 job losses in financial services.

The Centre for Economic and Business Research has forecasted that up to 11,000 financial services jobs could be lost during the next two years.

Shane Craig, managing director of Paymentcare.co.uk, says: “With thousands of jobs predicted to go this year as businesses tighten their belts in response to the credit crunch, any savings made from reduced mortgage repayments will be irrelevant to those who find themselves out of work.”

Craig says rate cuts are being regarded by borrowers as a cause for celebration.

But he warns that with the cost of everyday necessities having soared – petrol, food, gas and electricity – it would be foolhardy to interpret the latest rate cut as an excuse to relax.

For those who have no other way of meeting mortgage repayments if they lose their income, Craig says the sensible response to today’s rate cut would be to use the saving to pay for some form of mortgage protection.

Craig adds: “When times are lean and blowing cash on non-essentials seems to be out of the question, it’s tempting to use a rate cut as an excuse to splash out on a treat, but considering the cost could be about the same, taking out a mortgage payment protection insurance policy is clearly a better use of the money.”