Northern Rock, RBS, Nationwide & Halifax cut mortgage rates

Friday, 07 November 2008 05:33

Northern Rock, Nationwide, Royal Bank of Scotland and Halifax are to cut their standard variable rates (SVRs) by 1.5 per cent - following the Bank of England's cut yesterday.

The new Northern Rock SVR will stand at 5.84 per cent and the bank's loyalty rate - which those with the bank for over seven years qualify for - is cut to 5.59 per cent.

All Northern Rock tracker mortgage rates will also drop.

Halifax's SVR will drop 1.50 per cent to five per cent. the move covers the mortgage brands Bank of Scotland, Birmingham Midshires, Intelligent Finance and The Mortgage Business.

The rate cut at both lenders will take effect from December 1st 2008.

Abbey was the first lender without a government interest to cut its mortgage rate, but has now been followed by Nationwide Building Society

Now Lloyds TSB, Royal Bank of Scotland, Bradford & Bingley, HBOS and Northern Rock have cut rates following the base rate cut - and all are all or part owned by the state.

However, only a small minority of borrowers are on standard variable rate (SVR) - most being on fixed rate or tracker mortgages.

The main signal of banks intent will be how new mortgage products are priced.

The move came after the government has been placing pressure on the banks to follow the Bank of England cut yesterday.

Alistair Darling yesterday admitted the government could not force banks - even Lloyds TSB and HBOS in which it owns stakes and the nationalised Northern Rock and Bradford & Bingley - to cut rates.

However, today Gordon Brown sent a strong signal to banks stating the government and Bank of England had done all they could to lower the cost of borrowing and the obligation now rested with lenders.

He said: "The government has done what it can, the Bank of England has done what it can

"It is now up to the banks to take their lead seriously to resume lending and do so at rates that are appropriate and not rates that are excessive."

Some 30 lenders have withdrawn tracker mortgages until they are repriced at a higher margin over the base rate.

Northern Rock savings rates remain unchanged and under review and the Novocastrian bank will directly inform variable rate savings account holders if their rate is to change.

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