Mortgage providers have pulled more competitive deals from the market, despite appeals from the prime minister for lenders to pass on cuts in interest rates.
Woolwich, Lloyds TSB and Northern Rock yesterday all removed tracker mortgages, which follow the movements of the Bank of England base rate, ahead of today’s expected interest rate cut.
The moves followed Abbey’s decision on Tuesday to pre-empt a half-point cut in interest rates by increasing its margin on tracker mortgages by 0.5 percentage points.
If the Bank of England cuts the base rate, brokers say they expect all lenders to raise tracker mortgage rates to avoid being inundated with applications from homeowners looking to benefit from further interest rate falls.
This comes at a time when mortgage providers are trying to keep a lid on total lending. Too many new requests would also make it difficult to service existing customers.
Financial Times
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