Lenders Continue to Cut Rates for Consumers

Posted 2007-12-19

In response to the Bank of England’s decision to cut the interest rate on December 6th, thirty-one lenders have reduced their standard variable rates, according to Moneyfacts.co.uk, a financial comparison website. Moneyfacts found that of the thirty-one, six lenders reduced rates by less than 0.25%.

Recently, two mortgage providers who added their names to the list of thirty-one include Standard Life Bank and HSBC. Standard Life Bank announced it will reduce its “Freestyle” standard variable rate by 0.25% to 7.21%. HSBC, who currently prides themselves on having one of the lowest mortgage interest rates, announced it will reduce its variable mortgage rate from 7% to 6.75%.

Although this sounds like an excellent trend for consumers, given the current credit situation, Moneyfacts analyst Lisa Taylor explained that in comparison with the rate cuts lenders provided in August 2005, the last time the Bank of England lowered rates, the current rate cuts aren’t coming as quickly from lenders.

“The last time we saw rates fall back in August 2005, forty-six lenders had made announcements; the rate of change now appears to be relatively slow,” Taylor commented.

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