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As consumers struggle to make ends meet, many are looking to get a new low rate mortgage and coming up empty. It is becoming increasingly difficult to get a bank to give you a low rate mortgage, even if you have a great track record and perfect credit. Many fear that this may be the death of the low rate mortgage, at least for a few years until the markets begin to stabilize. This could take some time which is little help to those that need to get a low rate mortgage to avoid a foreclosure.

Ed Stansfield of Capital Economics, a consultancy, said: “If the recent rise in swap rates is sustained, two-year fixed mortgage rates are likely to approach 7% in the next few months. With demand in the market already so weak, that would represent another huge blow to the housing-market outlook.”

Melanie Bien of broker Savills Private Finance said: “RBS can do this even though Bank rate is remaining on hold for now because these accounts are linked to a standard variable rate. It is worrying to think what measures banks will take if rates actually rise.”

Related reading: Low Rate Mortgages