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Secured loans suffering as bank margins increase

Secured loans suffering as bank margins increase

Category: Loans

Updated: 24/12/2008
First Published: 19/12/2008

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 It is now over 6 months old so the content may be out of date.

Borrowers are missing out on the benefits of interest rate cuts while banks increase profits, it has been suggested.

Moneyfacts.co.uk has found that the average fixed-rate mortgage is now set at 1.16 per cent higher than the average tracker deal.

And with the latter type of secured loan becomingly increasingly rare, analyst at the price comparison site Michelle Slade has observed that consumers are being forced onto expensive fixed deals.

"It is evident that lenders are continuing to increase their margins, despite a fall in the cost of funding," she remarked, adding that the difference between the options has grown from the 0.14 per cent gap of 12 months ago.

The results follow those released by Moneyfacts.co.uk earlier this week, which showed that only ten per cent of mortgage providers have cut their standard variable rate by the full amount of the Bank of England's base rate reduction.

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 Any products featured may be withdrawn by their provider or changed at any time.

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