Last month’s interest rate cut still not passed on by some lenders

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by Kay Murchie

According to Moneyfacts, the financial comparison website, 24 lenders are yet to pass on last month’s interest rate cut to customers. This figure represents 25% of the market.

Moneyfacts said, of those lenders that have passed on the cut, 28% have lowered their Standard Variable Rate (SVR) by less than 0.25%, which was the percentage cut made by the Bank of England’s Monetary Policy Committee five weeks ago.

Moneyfacts added that the majority of lenders who haven’t passed on the cut, or have passed on less than 0.25% are building societies, with 18 (38%) of the 51 societies that offer mortgages still not declaring their intentions regarding any rate cuts and another 18 (38%) announcing cuts of less than 0.25%.

Michelle Slade of Moneyfacts said some lenders’ SVRs are now running at similar levels to the rest of their mortgage range and in some instances, products rates are actually higher than the SVR.

Halifax, ING Direct, Lloyds TSB and Nationwide have stopped offering their SVR rate to new customers, according to Moneyfacts.

The total number of mortgages available has been reasonably constant over the last few weeks. However, recent product withdrawals by lenders such as Northern Rock has resulted in a decline to low levels not seen in quite some time, concluded Ms Slade.

Moneyfacts has established that there are now 3,847 mortgage products available (including residential, sub-prime and buy to let), compared to 4,054 a month ago and 15,599 in July 2007.