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Mortgage rate cut laws backed

The potential introduction of legislation giving the courts the power to cap standard variable rates (SVR) wouldn't affect the ratings of residential mortgage-backed securities, ratings agency Fitch has said.

Banks have come under pressure to cut their rates in an attempt to bring them in line with other European countries.

Fitch pointed out that a legal cap has also been mooted, although it is not clear whether this would be introduced. A reduction in borrowing costs would improve mortgage affordability, it added.