Only Finance.com® - Trackers grow despite base rate cuts

Mortgages - Trackers 'grow despite base rate cuts' - 15/02/2008

Rates on tracker mortgages have risen recently, new research from online mortgage firm mform.co.uk has shown.

Despite cuts in the base interest rate totalling 0.5 per cent from the Bank of England, the firm says that trackers have risen in cost by up to 0.23 per cent over the same period.

This apparent disparity comes despite tracker products being designed to closely follow fluctuations in the base rate, Reuters reports.

Francis Ghiloni, marketing and business development director at mform.co.uk, said: "The Bank of England rate cuts are not feeding through to borrowers with trackers as lenders re-price.

"[We] argued that a 0.5 percent rate cut this month was the minimum that was needed to help both borrowers and lenders and our analysis shows that another cut is needed."

Examples of firms introducing tracker increases cited by mform.co.uk include Lloyds TSB - which has raised its rate from 6.11 per cent to 6.34 per cent.

Halifax also raised trackers by 0.2 per cent to 5.64 per cent, the Times reports.

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