Despite the Bank of England’s base rate cut few mortgage lenders have passed on savings to borrowers.
Northern Rock recently denied employing aggressive tactics when dealing with customers struggling to make mortgage payments. But housing charity Shelter has produced figures showing the total number of repossessed properties on Northern Rock’s books is three and a half times more than the industry average.
Standard Variable Rates
Mortgage borrowers on Standard Variable Rates (SVRs) tend to be those who struggled to get a mortgage and are most likely to fall into difficulties with payments. Borrowers with SVRs will therefore find little comfort in Shelter’s latest findings – or in the fact that only two mortgage lenders have passed on the base rate cut to their customers.
So far, only Britannia and Melton Mowbray have announced their intentions to cut the rates on their SVRs by 0.5% to 6.5% and 6.49% respectively.
Changing mortgage lenders
Which? Money editor Martyn Hocking said ‘It is disappointing that so few mortgage lenders have passed on the base rate cut to mortgage customers. With further base rate cuts expected over the coming months borrowers on SVRs should regularly check whether their mortgage lender is intending to pass on the rate cuts to customers. Where possible it would be advisable to move your mortgage to a new deal elsewhere.’
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