Banks have been accused of exploiting mortgage customers after their profit margins increased to the highest level since the beginning of the credit crisis.
The rise in margins on fixed-rate deals came despite historically low interest rates. While the Bank rate was just 0.5%, the average two-year fixed deal was 4.63%.
Thousands of home buyers have been left unable to find an affordable mortgage while those already on the property ladder who were looking to remortgage faced having their home repossessed if they were unable to find a cheap deal.
Lenders defended high rates in the past by saying that the cost of borrowing was based on the London Inter-Bank Offered Rate or swap rates — the rates at which banks borrowed from other institutions.
Daily Telegraph
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