‘No Guarantee of Mortgage Savings’ After Rate Cuts
Posted 2008-01-8
More base rate cuts this year will not necessarily guarantee lower mortgage repayments, warns a financial website.
Speaking after the Bank of England decided to keep the base rate on hold in January, David Kuo, Motley Fool’s personal finance boss, said the link between the bank’s decisions and mortgage payments is by no means certain.
Chancellor Alistair Darling recently urged financial services providers to pass on December’s rate cut to homeowners, Mr Kuo points out.
However, he maintains borrowers should remember mortgage loan providers may not pass on base rate changes to consumers as they are not obliged to even in the current climate.
Mr Kup said the lead priority for lenders now is to “rebuild their battered business.”
He said: “Therefore, many homeowners are unlikely to reap the benefits, even though there are indications that the Bank of England may continue to cut interest rates to stimulate the flagging economy.”
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