More rate changes from top mortgage lenders

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by Kay Murchie

Abbey and Halifax have announced that they have passed on last week’s interest rate cut to borrowers. However, they have increased the cost of short-term fixed-rate mortgage deals.

Last week, The Bank of England’s Monetary Policy Committee (MPC) announced it was lowering interest rates from 5.25% to 5%. This is the third time since December that interest rates have been cut in an effort to protect the economy from the global credit crunch.

Abbey said that it is working to ensure that its customers get the benefit of the Bank of England’s latest base rate reduction.

Abbey said it will also reduce its standard variable and base-rate tracker mortgages by the same amount.

A spokesperson for Abbey said in spite of the currently market volatility and high cost of funding, Abbey is committed to ensuring customers receive the benefit of the base rate reduction

Halifax, which is the UK’s biggest mortgage lender, has increased the interest rates of its new two-year fixed and two-year tracker mortgages by 0.5%. Existing customers will not be affected.

Rates for three, five and 10-year deals have been frozen, although an average increase in rates of 0.12% across all new Halifax mortgages was announced earlier this month.