Nationwide has cut its standard variable rate by 0.25 per cent and claims it now has one of the lowest SVRs of the major high-street lenders.
The move came after the Bank of England monetary policy committee lowered bank base rate from 5.5 to 5.25 per cent last week.
Nationwide, Woolwich, Halifax, Lloyds TSB, Alliance & Leicester and Cheltenham & Gloucester all announced they will be reducing their SVRs by 0.25 per cent.
Nationwide says its SVR will fall from 6.99 to 6.74 per cent. It claims that this will leave its SVR around 0.5 per cent lower than the SVRs of most other major high-street lenders.
C&G and Lloyds TSB will cut their SVR from 7.5 to 7.25 per cent. The decrease will come into effect on March 1 for existing borrowers and February 11 for new applications.
Halifax will also reduce its SVR from 7.5 to 7.25 per cent.
Connells Survey & Valuation managing director Ross Bowen says: “The mortgage market has shrunk by around 40 per cent compared with this time last year and housing transactions are significantly down.”
Savills Private Finance director Melanie Bien says: “Following the last bank base rate reduction in December, there were a couple of lender, such as Intelligence Finance, which did not pass on any rate cut while others, such as Alliance & Leicester, did not pass on the full reduction.”
Council of Mortgage Lenders director general Michael Coogan says: “Lenders’ rate-setting policies are more complex than simply the level of the base rate.
“They are determined by a range of factors including the cost of retail funding and the cost and availability of wholesale funding.”
Mortgage movers, p60