Even though the government has all but demanded that banks lower the interest on flexible mortgages, many have yet to do so and most banks are actually raising their rates. This has angered consumers as they attempt to budget their newly higher flexible mortgage payments. New accusations are also flying that only certain customers are getting rate reductions on their flexible mortgages, leaving those in the subprime market high and dry. Many experts believe that banks are raising their flexible mortgage rates simply to discourage consumers from getting a mortgage.Rachel Thrussell, head of savings at the financial information firm Moneyfacts, said: “Big banks tend to cut rates on some of their accounts by more than base rate. I expect the same this time round.”The Liberal Democrats warned that the Bank of England may have lost control of mortgage rates. Treasury spokesman Vince Cable said: “This will make little, if any, difference for the vast majority of people. There is currently a fundamental disconnect between the Bank of England’s interest rate and the rates high street banks are willing to offer customers.”In a statement, the Council of Mortgage Lenders described the mortgage market as “dysfunctional”.
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