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Mortgage lenders not passing on rate cuts, figures show
Fri, 31 Oct 2008
Half of mortgage lenders have not passed on the recent cut in the Bank of England base rate, according to new research.

A study by Moneyfacts.co.uk revealed that 50 per cent of institutions have not reduced their standard variable rate (SVR) at all since the fall in interest rates earlier this month.

It also found that 82 per cent of mortgage lenders have not passed on the full one per cent of the last three base rate falls.

Darren Cook, mortgage expert at the website, explained that SVRs have traditionally been of little relevance to the mortgage market, but with banks and building societies cutting other products they are set to become more important.

He said: "In real terms, most lenders' current SVRs are underpriced compared to the rest of the mortgage market, with some current products even having a revert rate that is lower than the initial rate."

With another base rate cut planned for next week, it could be that fewer mortgage lenders than last time pass on the reduction, Mr Cook added.

Yesterday, the Intermediary Mortgage Lenders Association claimed that figures on mortgage repossessions have been sensationalised.

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