Banks respond to interest rate cut
With The Bank of England cutting the rate of interest on December the 6th, two further mortgages providers have reacted, lowering the rate of selected products.
From January 2008 Standard Life will decrease the rate of its Freestyle standard variable rate (SVR) by 0.25% to 7.21% and HSBC will reduce the rate of its variable mortgage by the same margin to 6.75% as of December 24th. HSBC was one of the first lenders to act on the Bank of England’s decision, cutting the rate of its tracker mortgage shortly after the Bank’s announcement.
Financial comparisons website Moneyfacts.co.uk reported that 31 providers had cut their SVRs following the interest rate cut announcement with 6 providers reducing their SVRs by less than 0.25%. Moneyfacts Analyst, Lisa Taylor, believe the pace of change was slow compared to the last time rates were lowered in August 2005. She said:
“The last time we saw rates fall back in August 2005, 46 lenders had made announcements. The rate of change now appears to be relatively slow.”