Mortgage lenders ’splitting rate cuts’

Posted 2007-12-13

Some mortgage lenders are “splitting the difference” of last weeks base rate increase from the Bank of England, passing some 0.15 per cent of the cut onto borrowers, according to reports.

Data from mortgage broker John Charcol has revealed that some lenders are hiking their tracker margins up by as much as 0.1 per cent in order to make sure they benefit from the cut along with borrowers.

According to one expert from the firm, this could become a common strategy for mortgage lenders, meaning that borrowers should act quickly if they want to take advantage of the cuts.

However, Katie Tucker, technical manager of John Charcol, added that borrowers on trackers would be the first to benefit from the fall in interest rates, but that lenders would continue to be cautious in who they grant credit to in light of the credit crunch still lingering from the summer.

She added: “There is no denying that in 2008, borrowing of all types will be more difficult and more expensive.”

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