9 October 2008
The Bank of England's surprise decision to cut the base rate by 0.5% a day earlier than scheduled is welcome news for struggling homeowners, it has been suggested. According to uSwitch.com, many borrowers will be breathing a sigh of relief over the announcement as rates move down from 5% to 4.5%. People on tracker mortgages will see instant reductions in their monthly repayments, while those with secured loans may also benefit if lenders pass on the reduction. "This could be invaluable given the current economic uncertainty," said Ann Robinson, Director of Consumer Policy at uSwitch.com. However, she pointed out that borrowers will only make savings if their lenders cut their own rates, which they may struggle to do in the current economic climate. The Bank of England's latest credit conditions survey revealed that in the third quarter of this year there was a decline in the availability of secured loans.
© 2008 Adfero Ltd
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