THE credit crisis is the "most serious and prolonged disruption" to the financial system in decades and is set to continue for some time yet, the head of the Financial Regulator body said yesterday.
Patrick Neary warned anyone thinking about taking out a mortgage to "think carefully about future affordability and to examine all credit options" before securing a loan.
Speaking at the publication of the Regulator's annual report for 2007, Mr Neary said the credit crisis had meant there was a big reduction in the range of mortgage products available for consumers.
"The tightening of credit is having its greatest impact on those who want to borrow now and had made plans on the basis of a more positive situation some time ago," he said.
In the past few weeks lenders have increased the tracker mortgage rates for new customers and the standard variable rates imposed on existing customers.
He also stressed that lenders were now required under statutory consumer protection rules to only provide products suitable for their customers.
Although this move was designed to protect consumers, Mr Neary admitted that it may result in some people being refused credit. And consumers who find themselves in difficulty were advised by Mr Neary to contact their lender as soon as possible.
"The sooner a problem is identified, the easier it is to find a better repayment schedule."
He cautioned consumers against rushing to consolidate debts into one loan.
"These offers can look tempting, but can be much more expensive over the life of the loan."
The head of the state's Financial Regulator also revealed that the credit crisis had prompted it to widen and deepen its monitoring of the finance firms.
Banks are now required to submit weekly liquidity reports instead of quarterly ones.