Study finds that banks are quicker to charger higher interest than to pay it
Over the past six month the UK has twice seen the Bank of England hike up the interest rates, taking it from 4.5 percent to 4.75 percent, and more recently to 5 percent. For consumers in the UK this means that mortgages and other variable rate loans such as secured loans will demand higher monthly repayments.
Unfortunately, when it comes to applying these rises banks and building societies don’t tend to drag their feet when it comes to implementing these higher interest rates on borrowing. However, a recent report has indicated that these banks are not suite so quick off the mark when it comes to paying additional interest on savings as they are when it comes to charging additional interest on loans.
According to a recent study that was carried out for BBC News, savers are not getting the full benefit of interest rate rises but borrowers are being hit with the rises hard and fast. The research suggests that savers could have lost out on a fair amount of interest resulting from the two most recent interest rises simply because banks do not pass on the full benefit of the rises to savers, and concentrate instead on applying the interest rate rises to loans and mortgages.
The research was carried out for the BBC News website by Moneyfacts, and the findings of the research suggested that savers were being short changed when it came to seeing their interest rates on savings rise, but borrowers were being hit with the rise with speed and efficiency. According to the research it was taking an average of twenty days for interest rate rises to be applied on borrowing and around thirty days for interest rises to be applied to savings.
More Information:
- Mortgage article here......
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