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Secured loans rate cuts 'may not come'

Secured loans rate cuts 'may not come'

Category: Loans

Updated: 13/11/2008
First Published: 13/11/2008

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 It is now over 6 months old so the content may be out of date.

Lenders may be reluctant to pass on interest rate cuts to those with secured loans, it has been stated.

Responding to speculation that rates will drop, advisor at the Homeowners Advice Centre Al Elliot stated that many institutions will be reluctant to risk cash flow by cutting borrowers' repayments.

And he noted that as many people come to the end of secured loans deals, they may be forced onto their lenders' standard variable rate (SVR).

One of the only alternatives, according to Mr Elliot, is to find additional equity in order to obtain a competitive rate.

"The only consolation is that with the base rate coming down, many lenders' SVR is lower, so it's likely that the jump won't be quite as big as borrowers expected," he said.

Recent research by Tickbox and Opinion Matters, commissioned by Cheltenham & Gloucester, found that nearly a third of people would rather pay a higher mortgage rate than risk rejection by another provider.

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 Any products featured may be withdrawn by their provider or changed at any time.

 
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