Expert's warning over interest rate cut
A NORTH-EAST finance specialist has warned many borrowers will not see the benefit of today’s expected quarter point interest rate cut.
Philippa Colley, managing director of Richmond-based broker Pure Mortgage Solutions, said, in particular, borrowers on mortgages linked to the Bank’s standard variable rate (SVR) - such as discount deals - may find there could be a delay in lenders passing on all or a proportion of the rate cut.
She said: “Banks and lenders will try to maximise their profits in any way they can. However, borrowers currently on tracker deals would see the full benefit of a rate cut almost immediately as their deals are linked to the Bank’s base rate.”
Nearly one in 10 lenders had failed to say whether they were going to pass on December’s interest rate cut by the time the Monetary Policy Committee began its January meeting. A fifth of lenders also failed to pass on the full 0.25%, with some cutting their rates by as little as 0.1%.
