Tracker Mortgage rates down: but will your bank change its SVR?

Oct 09, 2008 | Comments 2

If you have an existing tracker mortgage then the Bank of England’s announcement of a half a point cut today should put a small smile on your face, as your Tracker mortgage rate will follow down at the Tracker rate you hold.

The half a percent cut in interest rate will not benefit everyone, if you’re on a fixed rate you may be kicking yourself, and if you are on your banks standard variable rate (SVR) then it’s not guaranteed that the banks will pass on the reduction onto you. Not all banks yet have announced if they are passing the reduction onto their customers.

Halifax whose standard variable rate (SVR) is at 7 percent has confirmed they are passing it on from the November 1 Halifax’s standard variable rate will be 6.5 percent.

Cheltenham & Gloucester and Lloyds TSB and subsidiary have said they are also dropping their SVR to 6.5 percent on November 1.

It’s reported that the rate cut will help one third of the 11.7 million UK households with mortgage debt, as the majority are on fixed-rate deals. We have yet to see what the banks will do with new fixed rate mortgages and if they will be affected by the rate change although these generally follow the Libor and not the base rate.

There have been rumours amongst analysts that we could see more base rate drops and could end up as low as 3.5 percent by the middle of next year.

Source: finance markets

Filed Under: Interest Rates

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  • jonathan goldenburgh

    I am a Northern Rock customer who has a variable rate which weet from around 4.5% to 7.5% earlier this year which raised my mortgage payments by £200 nearly. The 0.15% cut in their rate has saved me less than £5.00 on my monthly payments. I cannot understand how a govement (tax payers) owned bank is being allowed to do this. I feel that banks should not be allowed to go over 1% of the bank of england base rate. This would then allow struggling customers to at least have a fighting chance of survival. Can this not be passed by law to force banks and lenders into treating their customers fairly. We have part ownership of this bank and they seem to be doing whatever they want to get money out of their existing customers tight or what. Is their some governing body that a complaint can be offically logged with them so that investigation can take place.

  • jack

    Yes its disgusting, the government seem to have little or no power over the banks as the wealthy minority suck the struggling majority dry. The government should at least force banks to be transparent about their products. Many people for example, are fooled into thinking that because a SVR mortgage rises with BOE interest rate increases, then they will accordingly fall with respective reductions. I have been forced to correct many bank staff on how they promote SVR products. Even Tracker Mortgages can have built in clauses that allow the Banks to wriggle out of honouring interest rate cuts but its all in the small print! We live in the era of trickery and deception and the banks are masters of it.