‘No need for new mortgage products’

Despite a decrease in the number of mortgage products available, Firstrung claim s there are “enough” new products on the market.

Moneyfacts recently reported there are 40 per cent fewer mortgage products than three months ago but mortgage provider Firstrung claims new products are not the answer to current problems in the industry.

It reports there are still more than 3,000 mortgages available and that there is no need for product innovation.

“Truly, what the mortgage industry needs now is not extra complicated products, it needs rationalisation,” said chief executive officer for the firm Paul Holmes.

“It needs a huge shake up and the pain’s going to be quite severe,” he added.

He explained that the industry needs “contraction and consolidation” by about 50 per cent and that changes in the Bank of England’s base rate will not necessarily impact on mortgage rates.

The Bank’s current rate is 5.75 per cent but mortgage website mform.co.uk found the most common standard variable rate among mortgage products is 7.74 per cent.

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