Mortgage News
Lenders reluctant to reduce fixed rate costs
Borrowers are continuing to suffer as lenders remain reluctant to reduce the cost of fixed rate mortgages, according to Moneyfacts.
This reluctance is despite a 30 basis point reduction in the cost of funding on the swap rate market. The margin between the average two year fixed rate mortgage of 5.18% and the two year swap rate of 2.04% is now the widest margin on record at 3.14%.
However, during the last month, only a couple of lenders have reduced rates, including Cheltenham and Gloucester and Nationwide. Other lenders such as Barnsley Building Society and Chelsea Building Society have all increased rates.
Michelle Slade, spokesperson for Moneyfacts, said margins continue to be increased as lenders look to repair dented balance sheets.
She added: “Normal rules where lenders pass or decrease rates based on the cost of funding seem to have well and truly gone out of the window. Many lenders seem to be reluctant to pass on any decrease in the current climate.”
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