6 November 2008
There is no guarantee that mortgage borrowers and those with secured loans will benefit from the Bank of England's latest rate cut, it has been claimed.
According to the independent price comparison site uSwitch.com, it remains to be seen whether lenders will pass on the surprise 1.5% reduction, which has brought rates to just 3%.
This is their lowest level since 1955 and, according to economists, demonstrates the Bank's willingness to support the flagging economy.
"Sadly there is no enforcement in place to force mortgage lenders to pass cuts onto consumers," said Louise Bond, personal finance manager at uSwitch.com.
She pointed out that since October's cut of 50 basis points, only 50% of lenders have made a move to reduce their own borrowing costs.
However, giving its reaction to the latest cut, the Council of Mortgage Lenders said such a dramatic reduction "provides more room for lower borrowing costs more quickly".
© 2008 Adfero Ltd
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