Mortgage Rates Reduced

With all the doom and gloom about the sub-prime mortgage market causing a huge rise in foreclosures, there is finally some good news about mortgages. The Federal Reserve recently cut its prime lending rates which has resulted in a trickle down effect for mortgages. Mortgage rates have come down and that is always good news. Whether or not this will spark the lackluster housing market remains to be seen.

In the UK, they've taken rate reductions a step further. People who hold a Commercial Mortgage will have the rate on their loans automatically reduced to reflect the new lower rates. Lenders are passing rate savings on directly to customers to help deflect a slowing economy there. In the USA, you'd need to refinance altogether-a lender won't automatically reduce rates.

I think the Brits have this one right. The money is costing the banks less, so they can cut rates on a Commercial Mortgage and still maintain their margin. I think this shows more social and economic responsibility on the part of UK lenders than their American counterparts. Take a lesson from the Brits, US banks!