Mortgage rate cut effects ‘will be limited’

The new mortgage rates from one provider will have a limited impact, it has been posited.

Nationwide recently announced that it plans to cut the rates on 44 products, including fixed and tracker rate mortgages.

Commenting on the development, moneysupermarket.com has claimed that the prices, while competitive, are not market-leading and serve to benefit borrowers with more equity.

It stated that moves towards reduced prices are welcomed, but that any effect on the market will be minimal.

A statement from the group said: “Any move to cut rates should be seen as a positive step and it is good to see Nationwide raising the competitive stakes.

“However, the impact will be limited.”

It added, however, that the addition of a charge to secure a product would help benefit consumers, since it would prevent their credit ratings from being affected by multiple applications.

Credit Action’s Debt Statistics for 2009 have revealed that the total debt for the UK was £1.458 billion at the end of June.

Total lending for secured mortgages in the same period stood at £1.227 billion.

By Francis Finch

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