Lenders pledge to pass on rate cut

Lenders pledge to pass on rate cut

Lenders have pledged to reduce standard variable mortgage rates (SVRs) in line with the Bank of England’s 0.5% base rate cut.

Lloyds TSB, Abbey, Halifax, Barclays, Skipton, Cheltenham & Gloucester, and Nationwide have all promised to pass on the majority of the reduction.

The Bank of England last week cut the base rate in half to a record low of 0.5%.

Lloyds had vowed to pass on any cut prior to the Bank of England’s announcement, whilst other lenders waited until after the rate cut before they declared reductions.

Abbey has cut its standard variable rate by 0.45% and has launched its lowest ever mortgage rate for new customers at 2.99%.

Barclays-owned Woolwich said it will cut its rate by 0.5% in April.

Mortgage holders at Skipton, meanwhile, will see their standard variable rate drop to 3.5%.

Skipton chief executive David Cutter said: “We have pledged our residential SVR will never be more than three per cent above base rate and, even with this is at its lowest level for 315 years, we will honour our promise.”

Rates at Nationwide, Derbyshire and Cheshire building societies will all drop to 2.5% from 1 April 2009.

Andy McQueen, Nationwide savings and mortgages director, said: “Nationwide’s base mortgage rate is already one of the lowest amongst major high street lenders and this move will maintain that position, as well as reducing monthly payments for a borrower with a £150,000 interest only mortgage by £62 a month.”

SVR mortgage customers at Lloyds TSB and Cheltenham & Gloucester will also benefit from the full 0.5%, bringing rates down to 2.5%.

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