Lenders fail to pass on rate cut

First time buyers and other borrowers are struggling to keep up with mortgage repayments because lenders have not reduced their rates.

According to Moneysupermarket, despite the Bank of England cutting the base rate of interest in December, 78 per cent of lenders have not reduced their standard variable rates (SVR).

Only a fifth have passed on the cuts, while some of those have not passed on the full 0.25 percentage point reduction.

"It is very disappointing to see cuts of only 0.14 to 0.20 per cent being passed on in many cases," said Louise Cuming from Moneysupermarket.

"At the start of December, the average SVR was 7.57 per cent. As things stand now, the average rate will only have fallen to 7.44 per cent by the start of January.

"The Bank of England decision to cut rates by 0.25 per cent was to try and boost the economy, but a cut of 0.13 per cent won't do that," he added.

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