Government urges lenders to pass on full 1% rate cut

[Mortgages]

Lenders are coming under increasing government pressure to pass on to homeowners the full benefit of the latest 1% interest rate cut.Although banks cannot be forced to pass on the rate cut, the decision by the Bank of England to bring the rate of borrowing down to 2% was based on the premise that it [...]

More: Government urges lenders to pass on full 1% rate cut

[Scott Butcher]

The bank of England today chose to cut the base rate again to a 50 year low of 2%.
The 1% cut comes in light of signs that the economy could be facing a recession that is longer and deeper than first predicted.

Several banks, including HSBC and Lloyds TSB (also Cheltenham & Gloucester) have promised a full reduction in their standard variable rates and Skipton Building Society has promised at least a 0.95% reduction.

Halifax stated, before the news of the rate cut, that they will also pass on the full reduction to all those on tracker rates, in spite of the fact that it had a clause in it's mortgage contracts that allowed it to cap base rate trackers.

This is great news for borrowers who are either currently on tracker rates or standard variable rates, and also to those soon due to step out their current deal as they should all benefit in terms of monthly payments reducing. However, by how much they actually benefit remains to be seen, as not all lenders are expected to pass on the entire of the cut via either their standard variable rates or their trackers. For now, all we can do is wait to find out how the rest of the lenders react.

As for new deals, several lenders have already pulled their range of tracker rates and we wait to see how new rates are priced over the coming weeks.

[gdwebs]

Happy days for some then especially like a couple of investors i know who managed to get a discounted tracker so are now paying an interest only repayment of like 1.5%