Interest Rate Headache for Borrowers

3.15.00pm UTC (GMT +0000) Thu 9th Nov 2006

As UK interest rates rise to a five year high squeezing the budgets of homeowners and borrowers trying to pay off mortgages, credit cards and loans, the European Parliament is getting ready to voice its opinion, next week in Strasbourg, on possible future EU mortgage regulation.

Liberal Democrat European Economics Spokesperson Sharon Bowles MEP said "Any action at EU level must first and foremost benefit the public directly. Getting a mortgage is the biggest and most frightening financial commitment that most people will make during their lifetime. It is essential that borrowers are given full and accurate information in a manner that is clear and comprehensible before they commit themselves."

A voluntary European Code of Conduct has been in place since 2001 which seeks transparency of information and comparability across EU member states. Sharon Bowles says "It is early days but this Code has already shown some success. The European Commission must monitor its progress before considering whether it should be made mandatory."

Commenting on today's interest rate rise, Mrs Bowles said "More and more households are starting to feel the pinch of greater personal debt, exacerbated by high domestic fuel bills, and higher mortgage repayments. Mortgage lenders must take their responsibility in informing consumers seriously. At the very least consumers must have easy access to truly independent financial advice to ensure they are not unfairly persuaded to borrow out of their financial means."

Ends.

The Parliament's report on Mortgage Credit in the EU, which will be voted on next week in Strasbourg, is in response to a Green Paper issued by the European Commission.