Overnight Libor remains at 3 per cent, but three-month Libor has continued to drop closer to the 3 per cent base rate, now only 98 basis points away.
Mortgage lenders have defended their position of not ‘passing on’ the base rate as Libor spreads have remained high. But as Libor edges closer to base rate, where it has historically resided, lenders will be under pressure to lower mortgage rates.
Hamptons managing director Jonathan Cornell says: “This is great, great news but lenders need to pass it on.
“We need to see them pricing up some good trackers now – people just don’t want fixed rates with further rate cuts on the horizon.
“But right now, all they are giving us is fixed rates.”