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Secured loans holders 'not seeing benefits of rate cut'

Secured loans holders 'not seeing benefits of rate cut'

Category: Loans

Updated: 31/10/2008
First Published: 20/10/2008

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The Bank of England's base rate cut has not yet brought the relief some secured loans holders were hoping for.

That's according to analyst Michelle Slade, who notes that almost a week since the Bank's monetary policy committee voted to cut interest rates by 0.5 per cent, many lenders have not passed it on.

She says that those planning to secure a tracker mortgage will have expected rates to fall, but Abbey, NatWest and Royal Bank of Scotland (RBS) all negated the cut by raising rates by 0.5 per cent.

And although the average two-year tracker was 0.68 per cent above the base rate a year ago, it is now 1.85 per cent above.

"Hopefully as more lenders announce their revised rates this will be reduced, but not if more lenders follow the example set by Abbey, NatWest and RBS," said Ms Slade.

The Bank's cut was the first since April and brought the rate down to 4.5 per cent.

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