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Good news at last as interest rate is cut
06 November 2008
The Bank of England has slashed interest rates to 3%, the lowest level since 1955. It is hoped that lenders will pass on this drop to the cost of their variable rate mortgages however Michael Coogan, of the council of Mortgage Lenders said that lenders would take their time given the size of the cut by the The Bank of England.
Lenders have been under increasing pressure from politicians to pass on cuts in interest rates. Prime Minister Gordon Brown said on Wednesday before the interest rate cut announcement, "We want the banks and building societies to pass on the interest rate cuts to their mortgage holders".
Major lenders including HBOS, Abbey, Alliance and Leicester, Barclays and HSBC have said their variable rates are "under review".
A customer with a 25 year £150,000 mortgage on an average 2 year tracker tracker rate of 6.27% will see their monthly repayments fall by £134 to £856.
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