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MPs urge lenders not to pull fixes

In a Parliamentary early day motion last week, nine MPs made a plea to mortgage lenders not to pull their fixed rate products.

The MPs were concerned that given the recent interest rate rise, a number of financial institutions are considering withdrawing fixed rate mortgages.

The motion states: “If this were to take place it further inhibits the prospects of many people, particularly first-time buyers who seek the certainty of fixed rate mortgages, especially during the times when rates as well as house prices are escalating.”

Last week, lenders were accused of aiming to profit by withdrawing fixed rate deals. But most lenders countered that they had been forced to pull products because of high demand and surging swap rates.

However, Alan Cleary, managing director of edeus, says that for many borrowers the time is long gone when they would have benefited from cheap fixed rates.

He adds: “The government should stop raising interest rates if it doesn’t want lenders to withdraw products. Now is not the time to buy fixed rate deals unless you want the certainty of a fixed amount to pay.

“It is not lenders’ responsibility to look after the first-time-buyer market – it’s the government’s.”

Bernard Clarke, spokesman for the Council of Mortgage Lenders, says: “What is happening now is not any different to when interest rates have changed in the past.”

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