Mortgage lenders 'failing to pass on rate cut'

Posted: 05 Nov 2008 14:33:41 GMT

More than 30 mortgage lenders have yet to pass on last month's 0.5 per cent base rate cut to their mortgage customers.

According to a new report from consumer website moneysupermarket.com, a further 34 providers have opted not to pass on the full benefits of the reduction to their standard variable rate (SVR) customers.

Among these financial institutions, reductions of just 0.3 per cent, and in some cases 0.1 per cent, were the norm, the report revealed.

Louise Cuming, head of mortgages at moneysupermarket.com, suggested that some lenders are hoping their SVR customers "won't notice they are shelling out more than they need to on monthly repayments".

"This kind of attitude does nothing to rebuild consumer confidence in an area that is already suffering from reports of less than helpful practices among some lenders," she added.

This week, the Association of Mortgage Intermediaries (AMI) called upon the Bank of England to cut interest rates by a further one per cent in order to help stimulate the property market.

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