Over recent months the Bank of England has cut the base rate three times by 0.25% each time, taking the base rate down by a total of 0.75% since December. However, despite these base rate cuts many lenders have only passed on part of the rate cut and some have not passed on the cut at all, leaving borrowing struggling with repayments and stripping them of the benefits of any interest rate cuts.

The last interest rate cut in the UK was in April of this year, when the central bank cut the base rate by a further 0.25% taking it to 5%. However, according to recent reports many lenders have still not responded one way or the other to the latest base rate cut. Although the last rate cut was over five weeks ago, around a quarter of loans lenders – equating to around 24 lenders – have still to announce their intentions with regards to their borrowing interest rates.

Whilst some have cut their interest rates following the April base rate cut, around 28% of them only passed on a partial cut rather than the whole 0.25% cut. Officials state that some of the lenders that have only passed on partial rate cuts already offered some of the highest standard variable rates on the market. Some lenders have even been raising interest rates on some mortgage products, although a couple have recently announced that they are cutting rates slightly, including the Nationwide Building Society and the Abbey.

Many SVRs are not around the same as rates on other procure ranges, and one official said: “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.”

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