Banks cut mortgage rates after surprise announcement
Earlier this week the Prime Minister, Gordon Brown, and the Chancellor of the Exchequer, Alistair Darling, announced that the UK base rate was being cut by 0.5% from 5% to 4.5% in a surprise move one day ahead of the Monetary Policy Committee meeting. Other central banks around the globe, including the US Federal Reserve and the European Central Bank, also cut their base rates by 0.5% in a bid to try and stabilise the financial markets, boost the economy, and restore consumer confidence.
Following the announcement about the rate cut a number of major banks responded by quickly cutting the interest rates on their standard variable rate products by 0.5%.
The Halifax has confirmed that it will be reducing its SVR by 0.5% from the start of November, taking the rate down to 6.5%. On the same date Lloyds TSB will also be cutting its SVR by 0.5%. Natwest, Woolwich, First Direct, and Royal Bank of Scotland have all confirmed that they will also be cutting their SVRs by 0.5%.
The rate cuts come as welcome relief to many struggling homeowners. However, industry experts have said that despite the respite for homeowners house prices across the nation will continue to fall.
An official from the Council of Mortgage Lenders said: “All this decisive action augurs well for an improving market situation looking ahead, even though no one is pretending the tough times are over yet.”
Another industry official said: “Although today’s news will clearly help those with repayment difficulties, borrowers who still think they might encounter problems repaying their mortgage should get in touch with their lender as soon as possible.
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