The front page of today’s Daily Mail explained how one of Britain’s largest mortgage providers pre-empted an expected cut in interest rates by announcing a rise in mortgage rates, defying ministers who want banks to lower the cost of borrowing. Abbey, which provides one in four mortgages in the UK, will today increase its two and three-year tracker deals by up to 0.5 percentage points ahead of a rates decision by the Bank of England’s monetary policy committee tomorrow. The paper also noted that fixed mortgage rates remain high, despite the looming cuts in Bank of England base rate. Though they’re edging downwards, according to some experts, they are still far higher than before the banking crisis. The two-year swap rate-which banks use to borrow from each other for mortgages- is around 4.2pc. The best two-year fixed-rate mortgage is Northern Rock’s 5.35pc.
Elsewhere, the Daily Express looked at the winners and losers of a bank base rate cut. The winners included those with a tracker mortgage or who are on an SVR with a bank that decides to pass on the full rate cut. The losers are those taking out new tracker deals with less competitive margins, borrowers who have a fixed-rate mortgage and those who are on a standard variable rate and whose lender fails to pass on the full cut.