Pepper Advantage said it was cutting rates for another 10,000 residential customers, many of whom are unable to move to another lender and have been paying some of the highest rates in Europe.
These people were on variable rates that have gone as high as 9pc as recently as October.
Pepper, which manages the mortgages on behalf of vulture fund owners, will not offer them fixed rates.
These latest rate adjustments range from 0.15 percentage points to 0.5 points but will not take effect until October.
The move reflected ongoing changes in the interest rate environment, Pepper said.
“As with previous cuts, this reduction will apply primarily to customers who saw the highest increases since July 2022,” the loan servicer said.
Letters are going out soon to announce the reduction.
The reduction will bring average rates to around 5.3pc across all mortgage books serviced by Pepper Advantage on behalf of the vulture owners.
This is 1.6 percentage points higher than when the rates began rising in July 2022.
This figure compares to a 2.15 percentage point rise in the ECB’s base rate during the same period.
The variable rate mortgages serviced by Pepper Advantage come from a range of different loan books, originating at different times and different rates.
Pepper Advantage has hundreds of different variable rates and not a single rate.
The loan servicer insisted that with the latest reduction it will have implemented all interest rate decreases for variable rate customers, aligning with reductions by the European Central Bank. Some ECB rate cuts were combined.
It comes after the European Central Bank (ECB) cut its lending rates for the eighth time in June.
Governors of the ECB are due to meet this week but are not expected to cut rates due to uncertainty in the global economy. Political upheaval in France is another reason the ECB is unlikely to trim rates.
In the summer, the ECB cut the rate from which tracker mortgages are priced down to 2.15pc. It was last at this rate in late 2022, and rose to as high as 4.5pc at the end of 2023.
The pause follows more than a year of cuts as the ECB pivoted from tackling a surge in inflation to seeking to support the beleaguered eurozone.
Inflation has stabilised in the bloc, hovering around the central bank’s 2pc target in recent months.
“Any change in policy rates would be a big surprise,” analysts at HSBC said in a note on Thursday’s meeting.
Pepper managed about 100,000 loans at the start of 2024.
It said recently that said more than 13pc of loans it was managing on behalf of non-banks, which are not active lenders, had been refinanced since the start of 2024.
The firm, which is used by a number of investment funds to manage loans acquired after the financial crash, said this had been done either by borrowers switching to another lender or selling their home, often to buy another one funded by a mortgage elsewhere.