Major lenders to pass on rate cut

07-Feb-2008

Today's interest rate cut is to be passed on by many of the UK's leading mortgage lenders, which could be welcome news for first-time buyers looking to get on the property ladder.

Halifax, Nationwide, Abbey, Royal Bank of Scotland and NatWest have all moved quickly to say that the cut means they can cut their standard variable rates by 0.25 per cent.

While current homeowners may have to wait to see the benefit of the cut, new borrowers may see the benefit more quickly, which could be advantageous for those buying their first property.

Lloyds TSB are to advertise its lower standard variable rate from Monday which means borrowers could save around £22 a month on a £150,000 mortgage, says the report.

However, the Council of Mortgage Lender's (CML) director general, Michael Coogan, cautioned: "Borrowers should not expect that a base rate reduction will automatically result in a cut in standard variable rates or discounted rates across the market."

The CML is the trade association for the mortgage lending industry with members accounting for around 98 per cent of UK residential mortgage lending.

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