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Shock base rate cut – one month on
Today we can get a better picture of how the shock 1.50% cut in base rate last month affected the mortgage and savings markets and it doesn’t make for good reading.
75% of mortgage lenders failed to pass the 1.50% cut on in full to their SVR, but 92% of providers passed the cut on in full or more to their savings rates.
(See appendix for full details of SVR and savings cuts.)
Michelle Slade, analyst at Moneyfacts.co.uk, comments:
“Both borrowers and savers have been penalised following the last base rate cut and it is hard to believe that it will be any different if base rate is cut again.
“Many of the large high street banks passed the cuts on equally to SVR’s and savers. However, Barclays Bank, through its Woolwich brand, failed to pass on any cut to its SVR, but cut its savings rates by up to 1.75%.
“Savers need to be vigilant on the rate they are receiving as if base rate continues to fall, we could end up with a situation where the vast majority of accounts pay less than 1.0% interest.
“Mortgage rates for new customers are starting to come down, but nowhere near as quickly as they should or expected.
“Fixed rate mortgages are the worst hit, with the gap between the cost to the lender of obtaining the money on the money markets and the average rate widening rather than decreasing.
“Many lenders which withdrew tracker mortgages straight after the last cut have not replaced them and are unlikely to do so in the near future, particularly if base rate is cut again.
“Borrowers will be disappointed that they are not really feeling the full benefit and will be hoping that, as speculated, the banks and building societies will be forced to pass any future cuts on in full.
“Previously the cost of obtaining funding in the money markets has been cited as the reason for the lack of lending, but this has come down 1.72 basis points since the last cut and it’s about time this was passed on to mortgage deals.”
Appendix
Provider |
Cut in SVR |
Cut in Savings rates |
Difference |
Barclays Bank/Woolwich |
0.00% |
1.75% |
1.75% |
First Direct |
0.00% |
1.51% |
1.51% |
Loughborough BS |
0.00% |
1.50% |
1.50% |
Chelsea BS |
0.30% |
1.65% |
1.35% |
West Bromwich BS |
1.25% |
2.50% |
1.25% |
Chesham BS |
0.50% |
1.75% |
1.25% |
Bath BS |
0.25% |
1.50% |
1.25% |
Scarborough BS |
0.30% |
1.50% |
1.20% |
Dunfermline BS |
1.00% |
2.00% |
1.00% |
Stroud & Swindon BS |
0.50% |
1.50% |
1.00% |
Hinckley & Rugby BS |
0.65% |
1.60% |
0.95% |
Leeds BS |
1.15% |
2.00% |
0.85% |
Vernon BS |
1.21% |
2.00% |
0.79% |
Buckinghamshire BS |
0.75% |
1.50% |
0.75% |
Nottingham BS |
0.75% |
1.50% |
0.75% |
Britannia BS |
1.00% |
1.70% |
0.70% |
Principality BS |
0.80% |
1.50% |
0.70% |
HSBC |
0.81% |
1.49% |
0.68% |
Kent Reliance BS |
0.84% |
1.50% |
0.66% |
Alliance & Leicester |
1.10% |
1.75% |
0.65% |
Hanley Economic BS |
1.00% |
1.60% |
0.60% |
Mansfield BS |
0.90% |
1.50% |
0.60% |
Saffron BS |
0.91% |
1.50% |
0.59% |
Beverley BS |
0.75% |
1.25% |
0.50% |
Coutts & Co |
1.00% |
1.50% |
0.50% |
Dudley BS |
1.00% |
1.50% |
0.50% |
Melton Mowbray BS |
1.00% |
1.50% |
0.50% |
Monmouthshire BS |
1.00% |
1.50% |
0.50% |
Newcastle BS |
1.00% |
1.50% |
0.50% |
Northern Bank (NI) |
1.00% |
1.50% |
0.50% |
Teachers BS |
1.00% |
1.50% |
0.50% |
Tipton & Coseley BS |
1.00% |
1.50% |
0.50% |
Yorkshire BS |
1.00% |
1.50% |
0.50% |
Darlington BS |
1.05% |
1.50% |
0.45% |
Catholic BS |
1.06% |
1.50% |
0.44% |
Norwich & Peterborough BS |
1.25% |
1.60% |
0.35% |
Leek United BS |
0.90% |
1.25% |
0.35% |
Progressive BS |
1.24% |
1.55% |
0.31% |
Newbury BS |
1.20% |
1.50% |
0.30% |
Ulster Bank (NI) |
1.50% |
1.75% |
0.25% |
Furness BS |
1.00% |
1.25% |
0.25% |
Harpenden BS |
1.00% |
1.25% |
0.25% |
Ipswich BS |
1.00% |
1.25% |
0.25% |
The Co-operative Bank |
1.25% |
1.50% |
0.25% |
Ecology BS |
1.00% |
1.20% |
0.20% |
Intelligent Finance |
1.50% |
1.65% |
0.15% |
Earl Shilton BS |
1.10% |
1.25% |
0.15% |
Abbey |
1.50% |
1.60% |
0.10% |
Nationwide BS |
1.50% |
1.60% |
0.10% |
Bank of Scotland Mortgages |
1.50% |
1.50% |
0.00% |
Birmingham Midshires Solutions |
1.50% |
1.50% |
0.00% |
Bradford & Bingley |
1.50% |
1.50% |
0.00% |
Cheltenham & Gloucester |
1.50% |
1.50% |
0.00% |
Clydesdale Bank |
1.50% |
1.50% |
0.00% |
Coventry BS |
1.50% |
1.50% |
0.00% |
Halifax |
1.50% |
1.50% |
0.00% |
Lloyds TSB Scotland |
1.50% |
1.50% |
0.00% |
National Counties BS |
1.50% |
1.50% |
0.00% |
NatWest Mortgage Services |
1.50% |
1.50% |
0.00% |
Royal Bank of Scotland |
1.50% |
1.50% |
0.00% |
Scottish Widows Bank |
1.50% |
1.50% |
0.00% |
Yorkshire Bank |
1.50% |
1.50% |
0.00% |
Cambridge BS |
0.00% |
Not yet announced |
0.00% |
Chorley & District BS |
0.00% |
Not yet announced |
0.00% |
Shepshed BS |
0.00% |
Not yet announced |
0.00% |
Standard Life Bank |
0.00% |
Not yet announced |
0.00% |
Holmesdale BS |
0.90% |
0.90% |
0.00% |
Manchester BS |
1.14% |
1.00% |
-0.14% |
Marsden BS |
1.00% |
0.50% |
-0.50% |
Skipton BS |
0.50% |
Not yet announced |
-0.50% |
Stafford Railway BS |
0.79% |
Not yet announced |
-0.79% |
Derbyshire BS |
2.40% |
1.50% |
-0.90% |
Market Harborough BS |
0.90% |
Not yet announced |
-0.90% |
Barnsley BS |
1.00% |
Not yet announced |
-1.00% |
Bank of Ireland Mortgages |
1.10% |
Not yet announced |
-1.10% |
Cumberland BS |
1.10% |
Not yet announced |
-1.10% |
Scottish BS |
1.15% |
Not yet announced |
-1.15% |
Cheshire BS |
1.20% |
Not yet announced |
-1.20% |
First Trust Bank (NI) |
1.21% |
Not yet announced |
-1.21% |
Egg |
1.50% |
Not yet announced |
-1.50% |
ING Direct (UK) |
1.50% |
Not yet announced |
-1.50% |
Northern Rock |
1.50% |
Not yet announced |
-1.50% |
Source: Moneyfacts.co.uk 3.12.08 |
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Moneyfacts Group
Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry.
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