Mortgage lenders rush to cut rates

Within hours of the Bank’s announcement at noon, nine of the top ten lenders said they would pass the full quarter-point cut to their borrowers.  Only the stricken Northern Rock did not move its rates following the decision to bring down rates from 5.5% to 5.25%.  The ‘rush to cut’ follows criticism of banks and building societies for ripping off mortgage holders after the last rate reduction just before Christmas.  About 20% of lenders did not pass on the whole of the December decrease to hard-pressed borrowers.  The rate cut will help only the minority of borrowers, roughly one in five, who have a mortgage with a variable interest rate.  About 50% of homeowners have a fixed-rate loan which will not be affected.