Rate cuts not being passed on, says website

Personal finance website Moneyfacts.co.uk has said that most lenders have not passed on the recent base rate cut to their standard variable mortgage lenders.

The site said that in the two weeks since the Bank of England's monetary policy committee reduced the base rate to five per cent, just 38 out of 100 lenders had cut their variable rates and of these five had failed to pass on the whole 0.25 per cent reduction.

It also noted that 26 lenders have raised their tracker rates for new borrowers since the announcement of the cut.

There is also no sign yet that the interbank (Libor) lending rate is falling after the introduction of the Bank of England's £50 billion bond scheme was launched in a bid to boost market liquidity.

As of Tuesday the three month Libor rate was actually up from 5.88 per cent to 5.89 per cent, while the one-month rate was still at 5.49 per cent, Thompson Financial reported yesterday.

With no sign of any improvement in the mortgage market yet, many would-be homeowners may decide to look at the self build option as an alternative.


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