Many to miss out on mortgage rate cut, says CML

The Council of Mortgage Lenders (CML) has said that many of those with standard variable rate (SVR) mortgages will find they do not have the full benefit of the Bank of England's rate cut passed onto them.

Yesterday the monetary policy committee (MPC) of the Bank voted to reduce the base rate by 0.25 per cent from 5.5 per cent to 5.25 per cent.

CML director general Michael Coogan commented that the news would come as a boost for those with tracker mortgages, as these would automatically be reduced, but not for all those with variable rates.

He warned: "Borrowers should not expect that a base rate reduction will automatically result in a cut in standard variable rates or discounted rates across the market."

Such news may act as a reminder to those considering the home build option that buying a house with an SVR mortgage may not be the best way forward.

The vote to cut the base rate follows a decision to hold it last month.

Voting figures from the MPC meeting will be available on February 20th when the minutes are published.



© Adfero Ltd