Prime Minister Gordon Brown has urged lenders to slash their product rates in line with the Bank of England’s 0.25% base rate cut earlier this month. But pressures including rising LIBOR have made it increasingly difficult for lenders to pass on base rate reductions to clients. So, this week Mortgage Strategy asks…
Do you think lenders will pass on the BoE’s base rate cut to borrowers?
Alexandra Amaro, 29, waitress
UK lenders tend to look after themselves. Just because now’s a bad time for them I wouldn’t expect lenders to pass the interest rate cut onto borrowers. I’m from Portugal and I trust the banks there more. I would expect them to share cuts with consumers.
Amy Myers, 25, waitress
I don’t think it’s likely that banks will pass on the cut. Things have become more expensive generally so we are unlikely to see a drop in rates. And there are so many factors involved in the market crisis that I’m not sure it would make a difference anyway.
Amin Deriche, 35, kitchen porter
I don’t believe lenders will change their rates to reflect the recent cut by the Bank of England. They follow their own rules and will always set the rates themselves, so Brown’s demands are likely to fall on deaf ears. Lenders will do what they want.
Marius Nitica, 36, labourer
It’s unlikely lenders will pass on the base rate cut to consumers because they make their money through interest repayments. They make their decisions according to commercial criteria and politicians don’t have the power to influence them.
Laetia Kress, 26, student
In an ideal world they might pass on the cut but not in this one. Lenders are more likely to go with what makes them money rather than what’s good for borrowers. Brown may try to regulate this area but lenders will always find a way to make money.
Joseph Roth, 18, student
The mortgage industry is in bad shape at the moment both here and in the US. On my street back home in San Francisco, five houses have been repossessed. Lenders prefer to look after themselves so I don’t think it’s likely that borrowers will see the rate cut passed onto them.