Around 85% of borrowers 'to benefit or see no impact from rate cuts'

Around 85 per cent of mortgage borrowers will either see no impact or benefit directly from rate reductions by the Bank of England, according to an expert.

Fionnuala Earley, Nationwide''s chief economist, has stated that the total number of deals finishing in 2008 only represents about 15 per cent of outstanding mortgages, while 5.5 million people will have experienced no impact on their rate this year.

She when on to claim that over three million people on tracker loans, which account for 27 per cent of mortgage stock, will have benefited from the 0.75 per cent cut in the Bank''s rate since December.

"This is good news for the overall stability of the housing market and is a significant factor that differentiates the housing market of today from that of the late 1980s and early 1990s," Ms Earley explained.

She added that the statistics prove that "the underlying conditions for most mortgage borrowers are therefore more positive than some would suggest".

Specialist broker the Business Mortgage Company recently also claimed that the buy-to-let market was also still strong despite some mortgage withdrawals.

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