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February 8, 2008

Interest rates cut but has your mortgage rate been cut?

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by Kay Mitchell

Interest rates cut but has your mortgage rate been cut?

Yesterday saw the Bank of England’s Monetary Policy Committee cut interest rates from 5.5% to 5.25%.

Many lenders have responded and cut their rates but some lenders can take up to 2 weeks to announce changes to their standard variable rates while some will inevitably fail to pass on the full amount.

The quarter point reduction will be a relief to many homeowners who have experienced rising costs on their mortgage.

Those on variable mortgages will see their repayment costs fall while those on fixed rates will remain unchanged until their current deal expires.

Those with bank rate tracker mortgages will see their payments fall next month in line with the 0.25% cut.

However, those with standard variable rate (SVR) mortgages, or whose mortgages track or are discounted from SVRs, must wait to see how much lenders cut their rates by and whether they pass on the full 0.25% reduction.

It is expected that most lenders will announce their SVR decisions within the next 2 weeks.


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