Mortgage holders 'not feeling benefit of interest rate cuts'

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Mortgage holders 'not feeling benefit of interest rate cuts'

Fri 21st Nov 2008

A study released today by Moneyfacts.co.uk shows that many UK lenders are not passing on the benefits of the Bank of England's interest rate cuts to borrowers.

Only 28 per cent of mortgage lenders have agreed to cut interest rates on their standard variable rate mortgages and many tracker mortgages have disappeared off the market altogether.

Michelle Slade, an analyst at Moneyfacts.co.uk, said: "The lenders have been blaming the high costs of funds in the money markets for not bringing rates back down, but these rates have now started to fall."

She added that LIBOR, the rate at which banks lend to each other, was closer to the base rate of interest than before the October cuts meaning that banks could no longer use this as an excuse.

Earlier this month Gordon Brown called upon lenders to behave "responsibly" in the current economic climate, which has left some families unable to pay their mortgages.

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