RBS SVR cut to 5.19 percent: Halifax SVR cut to 5 percent

British banks Royal Bank of Scotland (RBS) including subsidiary NatWest joined Halifax who are owned by HBOS and agreed today to pass on the whole 1.5 percent cut onto their Standard Variable Rate (SVR) following the Bank of England’s surprise decision yesterday to cut the base rate by 1.5 percent to 3 percent. RBS new SVR will be 5.19 percent and Halifax new SVR will be 5 percent both rates will be applied December 1.

Nationwide also announced they would pass the full 1.5 percent rate cut on taking its SVR to 4.69 percent. The decision came after the Government stepped in and put pressure on the banks to cut their interest rates to help millions of homeowners by reducing some mortgage rates.

However the lenders have said the decision to cut the rate was based on the fall in Libor, this is the rate that banks lend to each other and which has been the reason why banks have been reluctant to pass the interest rate cut on.

With Libor dropping more than 1 percent to 4.496 percent from 5.561 percent today it bridged the gap slightly between the Libor rate and the base rate, although the Libor rate is still nearly 1.5 percent higher than the BOE official interest rate.

Source: Independent