Mortgage lenders are fairly quick to take money off us but clearly not so keen to return it in a hurry.
We say that because over a quarter of mortgage lenders have yet to announce their mortgage rate intentions; five weeks after the last interest rate cut by the Bank of England!
New data from comparison website Moneyfacts.co.uk shows 24 mortgage lenders have yet to state whether they will keep their standard variable rates (SVRs) on hold or reduce them.
Of those that have cut their rates, only 28% have passed on a reduction of less than the 0.25% cut in the base rate.
The Bank of England cut the official rate of interest by 0.25% to 5% on April 10; this was the third cut since December last year.
Some
mortgage lenders that have passed on the smallest cuts (largely building societies) already offer some of the highest SVRs on the market.
For example, Saffron Building Society has said it will keep its SVR at 7.15% while the Earl Shilton Building Society has cut its rate by just 0.05% to 7.35%.
Four others (Northern Rock, Barnsley BS, Nottingham BS and Scottish BS) have cut their rates by just 0.10%; the range now runs from 6.94% at the Scottish Building Society to 7.49% at Northern Rock.
Mortgage lenders have been scrapping cheap mortgages, failing to pass on reductions in the BoE base and tightening their lending criteria as they try to improve revenue during this credit crunch. The overall lack of movement has meant that many mortgage lenders' SVRs are now the same or less than rates on their product ranges.
ING Direct, Halifax, Lloyds TSB and Nationwide have stopped offering SVRs altogether to new customers. Moneyfacts' analyst Michelle Slade commented on the slow response by lenders:
"With falling house prices, and borrowers finding it harder and harder to get a new deal, the lenders' SVRs are becoming a more attractive option, but these lenders do not want to take on the more risky borrowers who do not have enough equity in their home to get a good deal."
- Mortgages now in short supply
The data also showed that just 12% of
mortgages still on the market are available with deposits of
5% or less, compared with 47% in August last year.
At the same time, the total number of mortgages available to you, including mainstream, adverse credit and buy-to-let mortgages has dropped sharply.
There are now just 3,847 mortgages available today, compared with 4,054 a month ago, 7,931 at the start of 2008 and 15,599 in July last year.
But don't worry, as despite the drop in numbers of available mortgages, there are still some competitive mortgage deals out there.
You should use an impartial adviser who can search all mortgage lenders, some you may never have heard of, to find the best deal for your situation.
(Please note that articles on Money Hospital do not constitute regulated financial advice. The articles are intended to provide general personal financial information. We urge you to consult an Independent Financial Adviser (IFA) before making any important decisions about your finances. All rates are correct at time of printing but are subject to change without notice.)
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