Two weeks ago the Bank of England cut base rate by 1.5 per cent, followed by the chancellor Alistair Darling ordering the UK’s top banks to pass on the cut to their existing tracker rates and their SVRs.
But according to Trigold, only nine lenders passed on the full cut – all the Government-backed or Government-owned lenders acquiesced, as well as Coventry building society.
A further 11 lenders made some discounts to their SVRs, and 13 more do not have a normal SVR connected to base rate.
According to the sourcing system, those that failed to pass on the rate included mainly smaller mutuals which rely on retail funding, but larger lenders such as Nationwide, Alliance & Leicester, Scottish Widows and Intelligent Finance all failed to pass on any of the 1.5 per cent cut as yet.
The best SVR rate is offered by Lloyds TSB/Cheltenham & Gloucester at just 5 per cent, while the worst SVR is offered by Kent Reliance at 7.59 per cent.
Trigold Business development and marketing director David Alymer says although these figures might look damning, there is a lot more to consider when it comes to ‘passing on’ rates. He says: “It’s difficult for lenders, there is a lot to making rate changes.
“It’s down to how they get their funding and also Libor, of course. And the bigger the institution, the longer it takes for a cut to come through – these things have to pass through various people, departments and actuaries.
“It also has to be remembered that mortgages are made up of component parts. A lender may, for example, cut the rate by 1 per cent, but then make up the rest of the cut in fees. A mortgage is more than just the headline rate.”