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Lenders 'failing to pass on rate cuts'

Lenders 'failing to pass on rate cuts'

Category: Loans

Updated: 31/10/2008
First Published: 24/10/2008

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 It is now over 6 months old so the content may be out of date.

A growing number of consumers are having to switch to their bank's standard variable rate for their secured loans, it has been revealed.

Mortgage expert at Moneyfacts.co.uk Darren Cook noted that many mortgage customers have no alternative due to the "turmoil" of the financial industry.

But despite the Bank of England having cut the base rate of interest by 0.5 per cent two weeks ago, he adds that more than three-quarters of lenders have failed to pass this on to customers.

"We could find ourselves in a situation where future monetary policy committee decisions on a rate cut will have little or no bearing on the majority of current household's mortgage outgoings," said Mr Cook.

Earlier this week it was revealed that the rate at which banks lend to each other has also been dropping.

Moneyfacts.co.uk called for this benefit to be seen by the consumer in the form of lower rates for secured and unsecured loans.

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