Most UK lenders now pass on rate cut

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by Kay Murchie

Earlier this month, The Bank of England reduced its base rate by a quarter of a point to 5.5% but lenders have been slow in passing the rate on to its customers. However, the majority of UK lenders have now passed on the rate cut to to borrowers, in spite of concerns that some would not.

Halifax and Nationwide, Britain’s two largest mortgage lenders were the first to say they would pass on the cut. Some smaller lenders opted not to reduce their rates by the full quarter of a percentage point according to the financial comparison site Moneyfacts.

Those with tracker mortgages saw their payments fall immediately, as they automatically move in line with the Bank of England’s base rate. However, the millions of homeowners who have fixed-rate deals have not benefited.

According to Moneyfacts, lenders who have yet to announce cuts include Alliance & Leicester, the Skipton Building Society and the Yorkshire Building Society.

An Alliance & Leicester spokesperson said the bank was reviewing its rates, and would make an announcement in due course. In addition, The Yorkshire and Skipton building societies said they will update customers before Christmas.