Interest rate cuts not being passed on immediately

paulalou76

My partner was listening to radio 2 today and heard a woman from moneysupermarket.com say that the 0.5% base rate cut should be seen immediately by tracker mortgage customers.

I have a tracker mortgage and I've realised that for the last few interest rate cuts my mortgage provider, Abbey, haven't passed on the cuts immediately. For example, in February of this year the base rate dropped to 5.25%. I wasn't notified until March, with the first reduction in my payments not seen until April. Is this normal or should I have seen the reduction in payments in the following month to the cut? This is my first mortgage so I'm not completely clued up as to how these things work.

If the cuts should have been passed on for the following month's payment, is it possible to claim this money back? Or at least get it taken off the amount I owe rather than on interest.

Many thanks.

Paula

Locoblade

See here
http://forums.moneysavingexpert.com/showthread.html?t=1206885

Same question, same lender

apc4tr

You will find buried in the T&C's that most companies will adjust the rate for tracker mortgages within a set number of days, on my IF Mortgage, it is 30 days.

What tends to happen is that if the rates go up, they put it on immediately, if it goes down, they leave it for the maximum 30 days

paulalou76

Oh yes, if the rates go up they increase them with immediate effect. I should have read the T&C's a bit more closely - thanks for your help.

I'm due to renew soon so might take the 30 days thing into account when looking for new deals.

Paula

koexelek

apc4tr wrote: »

You will find buried in the T&C's that most companies will adjust the rate for tracker mortgages within a set number of days, on my IF Mortgage, it is 30 days.

What tends to happen is that if the rates go up, they put it on immediately, if it goes down, they leave it for the maximum 30 days

Absolutely , my friend.

When the base rate has been increased at 12.00 on a Thursday previously, I've had e-mails from lenders as early as 12.05 saying that they are putting their rates up with immediate effect.:eek:

As you say, they drag their heels until the last minute possible if it's going down.

I think the only people that are really going to benefit from this rate cut are the people already on trackers.
I am immediately seeing lenders putting their rates and fees up already today to try to cancel out the rate cut.
The bottom line is, a lot of them still don't want to lend.

And this money that has been promised will take a while to filter through and have any effect.