|    FM Home   |    FM News   |    FM Forum   |    FM Blog   |   
Saturday 22nd of August 2009
February 8, 2008

Top lenders pass on full base rate cut


by Gill Montia
”Top

Yesterday’s base rate cut to 5.25% has prompted the UK’s leading mortgage lenders to reassure homeowners that they will pass on the full quarter-point reduction.

Nine of the top ten lenders have so far pledged to followed the Bank’s lead, with only Northern Rock unmoved.

The quick response follows high-level criticism of banks and building societies in December, when around 20% did not pass on the full benefit of the reduction.

Taking an average mortgage of £150,000, February’s rate cut will reduce monthly repayments by about £24.

However, the gain will be swallowed up by increases in other household bills, such as food and energy.

Earlier this week, E.ON (formerly Powergen) became the fifth of the leading six UK energy companies to raise its prices.

In a statement accompanying its decision to lower the base rate, the Bank of England warned that it expects prices to continue to rise, “possibly quite sharply”.

Mike Naylor of the price comparison website uSwitch.com, is concerned that: “The rate cut could still be too little, too late, for some.”

Adding: “People are currently paying out 35% of their take-home pay on mortgage repayments, and ten million consumers already feel that their current level of overall debt is unmanageable.”

In addition, February’s rate cut will only help mortgage borrowers with a variable interest rate (around one in five). Approximately 50% of homeowners have fixed-rate loans, which will not be affected.

Discuss this in the Finance Markets forums

Story link: Top lenders pass on full base rate cut


Add to Bookmarks:

ADD TO DEL.ICIO.US     ADD TO DIGG     ADD TO FURL

ADD TO STUMBLEUPON     ADD TO YAHOO MYWEB     ADD TO GOOGLE     ADD TO SPURL

 

Tags:

 

Previous: « Northern Rock to appear on Government accounts
Next: Tokyo sees finance ministers arrive »

Visited 1352 times, 1 so far today

No Comments »

No comments yet.

RSS feed for comments on this post.

Leave a comment