RBS denies mortgage borrowers full base rate cut
RBS and its subsidiary NatWest will only be passing on half of yesterday’s base rate cut to mortgage customers on their standard variable rates (SVRs).
The lenders are reducing SVRs by 0.25%, although they claim most customers will not be missing out because the majority are either on tracker or fixed-rate deals.
In the case of the trackers, they will receive the full 0.5% reduction; for the fixers there will be no change but borrowers with flexible mortgages will also benefit from the 0.25% reduction.
The bank says it needs to consider the impact on savers of the downward trend of the Bank of England’s base rate.
According the group’s head of retail, Paul Geddes: “It is more important than ever to consider both our savings and mortgage customers when determining any rate changes.”
The bank’s decision on mortgage rates means that many of its savings accounts will be maintaining their current interest rates and any reductions will be below 0.20%, on average.
Meanwhile, Halifax, Nationwide, Lloyds TSB and its Cheltenham & Gloucester subsidiary are all reducing their SVRs by 0.5%, in line with the base rate cut.
Reactions from other lenders are awaited.