Mortgage interest does not reflect base rate, website claims
Thu, 20 Aug 2009
MoneySupermarket has recently said that despite the Bank of England base rate being at an all time low of 0.5%, few lenders are representing this in their mortgage rates with some worse than others.
The typical mortgage interest rate for new borrowers has dropped 1.3% to 5.12%, significantly less than the reductions we have seen in the Bank of England’s base rate, some 4.5% since last august
The variation between rates from one lender to the next is no small matter, with Northern Rock mortgages falling just 0.27%, by comparison Alliance and Leicester has seen an average cut of 2.3%.
A survey conducted by MoneySupermarket indicates many lenders are Suring up their mortgage books by steadily increasing the spread from the London Interbank Offer Rate (LIBOR).