According to a report from the Financial Service Authority’s (FSA) chairman, Lord Turner, rules on tighter regulation such as those discussed in recent articles are likely to result in consumers facing higher mortgage rates as they bear the costs.

In order to prevent another banking crisis in the future, the FSA is looking at increasing the amount of capital that banks and other mortgage lenders must hold back in order to fund their lending.  The cost of this is likely to be passed onto consumers.

This news will be disappointing to those consumers who have been waiting in hope for lower interest rates as mortgage lenders gain confidence, in particular from banks such as the Royal Bank of Scotland (RBS) that are now majority owned by the government.  This news makes it even more important for consumers to ensure they get the best possible interest rate on their home loan that they can.

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