Secured loans holders 'not seeing benefits of rate cut' - Loans - News - Moneyfacts


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 It is now over 6 months old so the content may be out of date.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.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Regulator to take closer look at high-cost credit

When used well, credit can be a viable way to help make ends meet and balance the books – but the problem comes when that credit is of the high-cost variety. The regulator has will be taking a closer look at the sector to see what else can be done.

The payday loan market is still broken

The payday loan market has been under fire a lot in recent years, and as a result, the financial regulator stepped in. But has it made a difference? Unfortunately, it looks as though there’s still a lot of work to be done.

Get a record low rate loan - if you qualify

Competition in the personal loans market is as hot as ever, so much so that one loan provider has slashed rates to the lowest on record – but only to those who fit the bill. The shopping bill, that is…