Lenders hoping to get the full benefit of the base rate drop are being held back by lenders who increase the cost of their tracker mortgages and other variable rate deals.
A large number of consumers have put in applications for tracker mortgages on the back of the Bank of England's decision to lower the base rate of interest. However, many providers have opted to increase the rates of their deals to counterbalance the drop in the national interest rate.
Katie Tucker from John Charcol commented, “Lenders are clearly still recouping their losses from the liquidity crisis, which does not bode well for borrowers on discounts or Standard Variable Rates."
She added, "After the last cut, around a fifth of lenders did not pass the cuts on at all, and many others only passed on 0.1 – 0.2%. I suspect lenders will be as reluctant to pass on any Bank rate cut moving forward."
Other industry experts still think the tracker mortgage is the hot product of the moment and there are still deals to be had.