Lenders respond to base rate cut
A number of lenders have recently announced that they will be passing on the full 0.25% interest rate cut applied to the base rate earlier this month, which could bring welcome relief to some homeowners. Whilst some lenders have announced recent rises in their interest rate, some have already said that they will be passing on the full rate cut – good news for Alistair Darling, who has already urged lenders to do their bit to help the financial crises and the economy by making sure that they passed the rate cut onto consumers.
The standard variable rate from the Internet arm of HSBC, which recently announced restrictions to its mortgages lending, has now fallen to 6%. This is now one of the lowest rates amongst major banks and buildings societies. The Cooperative Bank has also announced that it will be passing on the full rate cut to consumers, taking the standard variable rate to 6.99%.
The Alliance and Leicester also said that it would be passing on the full rate cut to consumers, with its standard variable rate dropping down to 7.19% as a result of the base rate cut. However. whilst this news should have been welcomed by many it seems that most people are too worried about rising living costs such as petrol, energy bills, and food, all of which have counteracted the benefit of the rate cut.
The chancellor of the exchequer, Alistair Darling, recently stated that he wanted all mortgage loans companies to pass on the full rate cut to consumers, in a bid to try and improve affordability, increase spending, and boost the flagging economy.
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