The pressure is on to pass on rate cuts to homeowners
The Government is putting pressure on Banks and Building Societies to pass on the latest 1% interest rate to their mortgage customers.
For anyone with a variable rate mortgage this could mean significant savings each month on their mortgage repayments if the rate is passed on. Tracker customers should see the benefit of the rate cute automatically.
On a typical £150,000 repayment mortgage the monthly repayments could drop by approximately £75.00 with the latest rate cut.
However for the millions of people who opted for a fixed rate deal on their mortgage as they needed the comfort of knowing their monthly repayments were not going to change the rate cut will provide no respite or benefit.
Fixed rate deals make up about 50% of the market so all the hype of whether the rate cut will be passed on or not is irrelevant to half of the current mortgage owners in the UK.
Many mortgage lenders have withdrawn their tracker deals for new borrowers at this time in order to survey how the industry reacts to the cut.