The Bank of England may have reduced Bank rate yesterday to the lowest rate since 1951, but how many of the major lenders will pass on the latest cut to customers?
Homeowners with tracker mortgages will be some of the first borrowers to benefit,with Nationwide saying it will pass on the full 1 per cent cut to existing tracker customers. But for new customers taking out new its tracker deals, the cut will be only 0.25 per cent. Yorkshire Building Society said nearly nine in 10 of their existing tracker mortgage customers would not see any fall. A floor, or ‘collar,’ was written into their contracts, stipulating this would be enforced if Bank rate fell below 3 per cent. The vast majority of existing tracker customers with the Skipton also have an identical 3 per cent collar. HBOS said about 500,000 existing tracker customers will get the full benefit of the Bank rate cut, as it was not enforcing the 3 per cent collar in its contracts. But the bank said it is cutting its standard variabe rate (SVR) by only 0.25 per cent, saying that it had to balance the interests of borrowers with those of savers and that the difference between mortgage and savings
