Banks Are Struggling as Mortgage Interest Rates Rise: But Its Good News for Savers

The current credit crunch in the financial markets may be causing trouble within the mortgage market but for people who have money saved up, they are benefits to be had as banks are increasing interest rates on fixed-term savings accounts in order to get more cash into their business to ease any liquidity problems.

However, what is good for savers is bad for borrowers, as anyone with a mortgage may see their interest rates increasing.

The second largest mortgage lender in the UK, Abbey, said today that it is going to increase the interest rates charged on its range of tracker mortgages by up to 0.2%.

At the moment should investors be saving cash or borrowing cash through loans?

If central banks lower interest rates then the people with home loans will be a better position then savers, so it shows how fast the tables can turn.

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