Mortgage rate cuts

This month saw the Bank of England cut the interest base rate to 1%, bringing rates down to a record low and leaving homeowners wondering what the impact might be on their mortgage payments. While the majority of mortgage lenders decided against reducing their standard variable rates (SVRs) in accordance with the base rate cut in January, some passed on a smaller rate reduction, and others kept their rates unchanged.

The good news following the latest base rate cut of 0.5 percentage points is that several lenders have already confirmed they will be reducing the rates on some of their mortgage deals. In this article we will be taking a closer look at how some of the major players have reacted to the latest base rate cut.

Nationwide building society

Nationwide has confirmed that it will be passing the full 0.5% interest rate cut onto its customers by bringing its SVR down to 3% from the beginning of March. Meanwhile, borrowers who have taken out a tracker mortgage with the lender since the start of December last year will also see their rates drop.

Skipton building society

Although those Skipton building society customers who have a tracker mortgage will not see a decline in their rates (because their repayments are collared at 3%), the lender has said that, within the next 30 days, it will be reducing its SVR by 0.5%; taking it down to 4% as a result.

Halifax

Halifax has announced that, from 1 March, the lender will be reducing both its tracker mortgages and its SVR by the full 0.5%. This cut means that SVR customers will see their rates drop to 4%.

Barclays / Woolwich

From the beginning of next month, Barclays will be cutting Woolwich's SVR by 0.5%, which will take it down to 4.99%. Meanwhile, the lender's tracker mortgage customers will be able to enjoy the same rate cut from 1 March.

Lloyds TSB / Cheltenham & Gloucester

Lloyds TSB and the bank's lending arm, Cheltenham & Gloucester, have confirmed that, from the beginning of March, they will be passing on the 0.5% cut in full to customers who are on the bank's SVR, as well as those with a tracker mortgage. As a result, SVR customers will be able to enjoy a rate of 3%.

Royal Bank of Scotland (RBS) / Natwest

Although RBS has confirmed that it will not be passing the full 0.5% rate cut onto customers who have loans linked to its SVR, it has said that, from 1 March, it will be reducing it by 0.19% to 4%. This change will also affect NatWest mortgage customers. Meanwhile, anyone who has a tracker mortgage will see their rates drop by the full 0.5%.

Source: guardian.co.uk | Last updated: 6th February 2009

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