State banks fail to pass on low rates
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Some of the state-backed banks are not passing competitive mortgage rates to borrowers despite being given billions of pounds from taxpayers, according to figures from Moneyfacts.co.uk.
It claims the state banks are placing higher priority on getting out of Government ownership than passing competitive rates to borrowers.
RBS offered the most competitive rates of those in the survey between March 2009 and March 2010, with two-year fixes ranging from 3.27 per cent to 4.04 per cent, while Northern Rock and Halifax peaked with rates of over 5 per cent at times during the period.
A spokeswoman for Moneyfacts.co.uk says: “Many hoped the state-owned banks would be at the front of the queue for unlocking the mortgage market but this is not the case.”
Savills Private Finance director Melanie Bien says: “I can see why borrowers are a bit bemused, given that interest rates have not moved for a year. The banks have got a lot of pressure on them to repair balance sheets. They are trying to balance too much at the moment.”
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