NHL borrowers get relief at last

LONG-SUFFERING borrowers with the troubled specialist lender National Home Loans should soon see their first mortgage rate cut in more than a year.

A spokesman for NHL, which has kept its standard rate at 12.15 per cent since September 1991, said the company hoped to cut its mortgage rate by 1 percentage point shortly.

NHL has been charging its borrowers over the odds because of the financial difficulties the company ran into last year. Borrowers with arrears on NHL loans have been paying an extra 1 percentage point, at 13.15 per cent, unless they have come to an arrangement to sort out their problems.

Specialist lenders are cutting their rates now, but not all have yet made a decision about the size of the cuts and in some cases existing borrowers will have to wait until January to benefit from them.

Where the specialist lenders have made a decision, their nominal rates are still settling at a shade above those of the building societies.

But as the centralised lenders charge interest in arrears rather than in advance, the annual percentage rates are close.

Nick Deutsch, chief executive of First Mortgage Securities, expects to bring his company's basic lending rate down at least 2 points from its present 11.65 per cent level on 1 January.

'The Halifax has set its rate at 9.29 per cent. I don't think we will be materially different,' he said. The Mortgage Corporation has a standard rate of 10.99 per cent at present, nearly 2 points more than the lowest rate announced by a building society so far. Barry Meeks, commercial director, said the company hoped to reduce its rates in December or January. It has 45,000 borrowers, about 70 per cent of whom pay a variable rate, with the remainder paying fixed or capped rates.

He said TMC had decided to bring its rate down to 9.75 per cent before last week's base rate cut but might now be able to cut the rate further.

Household Mortgage Corporation (HMC) which has 40,000 loans, half of which are on fixed or capped rates, has decided to bring its rate down from 11.45 per cent to 9.95 per cent from the beginning of January.

Bank of Ireland is cutting its standard home loan rate by 1.25 percentage points to 9.8 per cent from 1 December. The bank charges a variety of rates, however, and they will now range from 9.45 per cent to 10.05 per cent.