Lloyds TSB and C&G will pass on the full 1.5 percent cut

Lloyds TSB and its lending arm Cheltenham & Gloucester said they will pass on the full 1.5 percent cut in interest rate made by the Bank of England today, cutting its Standard Variable Rate (SVR) from 6.5 percent down to 5 percent this change will be effective from December 1. Those on fixed mortgage rate products will not see a change until their fixed rate deal ends.

Borrowers of Lloyds TSB that have loans linked to the banks SVR will benefit from the cut, this move will help a homeowner with a £150,000 mortgage who did not fix into a deal but instead have been paying the banks SVR will see a reduction of £138 to their repayments.

The cut from Lloyds TSB who are about to take over HBOS, had to pass the rate cut onto the customers as in the banks terms and conditions It vows that its SVR will never be more than 2 percent above the base rate of the Bank of England.

However lenders without this term in their contract may decide not to pass on the rate, although the cut will have to be passed onto any borrower who is on an existing Tracker Mortgage, although some lenders do have limits on their tracker mortgage rates and how low they can go, so some may not benefit from the full 1.5 percent.

Source: Guardian