All but two UK banks snubbed government calls to pass on yesterday’s dramatic interest rate cuts to new customers and more than 20 lenders withdrew deals that would have slashed borrowers’ monthly mortgage repayments.

The withdrawals mean that most of the UK’s biggest lenders have stopped offering any tracker mortgages, which automatically move up and down in line with the base rate, and brokers fear the rest could disappear by the weekend. “By the end of today there will be very few trackers left on the market,” said Ray Boulger, senior technical manager at John Charcol.

When banks launch their new tracker deals, perhaps next week, they are expected to increase the margin they charge above the base rate and may continue to charge hefty arrangement fees to offset rate cuts.

Financial Times

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