7 Dec

Mortgage providers pass on interest rate cut

Mortgage providers pass on interest rate cut

Major mortgage lenders have fully passed on the Bank of England's 0.25 per cent interest rate to borrowers.

It had been speculated that many leading lenders would not pass on the full cut in a bid to recover profits which have been hit by recent turmoil in the financial markets.

However, today Nationwide, Royal Bank of Scotland (RBS), Halifax and First Direct all confirmed they will cut their rates by the full amount.

Other lenders are now expected to follow suit, according to Louise Cuming, head of mortgages at price comparison site moneysupermarket.com.

She said: "It is interesting that because there was a feeling that lenders would use this opportunity to tweak their rate. But they have obviously realised that the bad publicity they would get form not passing on the full rate reduction at a time when a lot of borrowers are struggling would be too much to take."

Nationwide and Halifax's cuts will come into effect as of January 1st, while First Direct and RBS' cut will be effective immediately.
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