Homeowners ‘would miss out’ if interest rates fell

The majority of homeowners in the UK would miss out on the potential for financial rewards presented by cuts in the base rate of interest, according to Lloyds TSB.

While around 15 per cent of mortgage borrowers across the country signed up to an interest rate tracker deal when buying their home, many others have ruled out the option and would not benefit from a cut in the cost of borrowing.

However, the financial services firm points out, many homeowners and credit consumers have seen their debt management difficulties worsen in recent months after not protecting themselves against rises in the base rate of interest.

Alison Burns, director of network mortgage sales at Lloyds TSB comments: “Having witnessed five rate rises in two years, it’s not surprising some consumers are reticent to take a gamble on rates not rising again.

“By ruling out a tracker homeowners are missing out on the opportunity to capitalise on future rate drops.”

Earlier this year, a report from the Consumer Credit Counselling Service predicted that homeowners around Britain would be “on the rack” financially throughout 2007.