Over 4m borrowers will pay less after the Bank of England slashed the interest rate to its lowest ever level.
But after last month’s one per cent base rate cut only 19 lenders opted to pass the last rate cut on in full according to new data from Moneyfacts.co.uk.
Around 40% of borrowers have a tracker mortgage, the majority of which will automatically move down in line with today's 0.5% cut.
Michelle Slade, analyst at Moneyfacts.co.uk: “Since last month's rate reduction,76% of mortgage providers have announced a cut to their standard variable rate (SVR), with only 19 lenders opting to pass the cut on in full. 72% of those that have announced opted to pass on between 0.15% and 0.99%, amongst them some of the UK’s biggest mortgage lenders.
“With each base rate cut, the number of lenders passing the cut on in full to their SVR continues to dwindle. It is likely that some lenders have already cut rates as low as they are prepared to go. “With Stafford Railway BS cutting its SVR to 3.99%, it is disappointing that other building societies have SVRs over 6.00%.
“Some building societies are opting not to cut their SVR so they can offer higher rates to their savers. However, the three lenders with the highest SVRs have all cut savings rates by more than the base rate cut, with Stroud & Swindon BS cutting rates by up to 2.50% and Kent Reliance BS cutting rates by up to 2.00%. “Customers with Cheltenham & Gloucester, Lloyds TSB Scotland and Skipton BS should continue to benefit as these lenders have a guarantee to offer an SVR at a set percentage above base rate.”
James Caldwell, director at Fairinvestment.co.uk: “Even though mortgage rates have fallen, lenders are still very reluctant to lend to people unless they have a substantial deposit. Until the mortgage market becomes first time buyer friendly, the housing market is unlikely to recover any time soon.”
