Moneyfacts reflects mortgage rate decline

Posted 2007-12-18

Data released last week by Moneyfacts.co.uk, a financial comparison Web site, showed 31 providers had publicized changes to their standard variable rates (SVRs) following a cut in interest rates.

Six providers reduced their SVRs by less than 0.25%, while rates on two other mortgages have been slashed in line with the recent Bank of England cuts. 

Beginning January 1st 2008 Standard Life Bank will shrink its Freestyle SVR by 0.25% to 7.21%. 

In keeping with the cuts, HSBC Bank plc (HSBC) has revealed it will reduce its variable mortgage rate by 0.25% on December 24th 2007 from 7.00% to 6.75%. 

HSBC was quick to react to the Bank of England’s decision on December 6th to cut interest rates, dropping the rate on its tracker mortgage almost without delay. 

Following its latest reduction, HSBC hailed its variable mortgage rate as being at least 0.24% lower than numerous other main street lenders. 

However, its analyst Lisa Taylor commented that it compared unfavourably with the pace at which providers slashed rates last August in 2005 – which was the last time the Bank of England reduced rates. 

Ms. Taylor stated, “The last time we saw rates fall back in August 2005, 46 lenders had made announcement the rate of change now appears to be relatively slow.”

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