Will RBS, Lloyds TSB and HBOS do more for borrowers than Northern Rock?

Back when the Government used tax payer’s money for Northern Rock, the public was very unsure about the outcome. Now we are having another £37 billion of our money invested into banking giants HBOS, Lloyds TSB and RBS. But will they do more for its borrowers than Northern Rock?

Northern Rock will not pass on the full half a percent rate cut that was announced by the Bank of England last week even though Northern Rock are now a government run bank, instead they will pass on only 0.15 percent cut on its Standard Variable Rate (SVR) from November.

Most banks have passed on the full half a percent rate cut to their customers, but Northern Rocks reasoning for only passing on 0.15 percent to its customers is that the Libor rate (the rate at which banks lend to each) is still very high, however this has not stopped other banks passing on the cut so why should Northern Rock be different. Given that Northern Rock’s SVR is at 7.34 percent this is still above the three-month Libor rate, so this makes good business for Northern Rock at the expense of its borrowers.

RBS, Lloyds TSB and HBOS have all reduced their Standard Variable Rates by the full half a percent.

Source: mortgageintroducer