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Halifax mortgage rate down

Written by Gary Howes

Wednesday, 08 October 2008

Halifax celebrates bank rate cut with mortgage rate reduction.

HBOS (LON:HBOS) today welcomed today's announcement by the Government regarding the injection of capital into the financial industry.

According to the company the Government's announcement represents a very real and serious intention on the part of the authorities, following consultation with the banking industry, to bring stability and certainty to the UK banking system.

HBOS believes that this initiative is very much in the interests of its shareholders and customers.

Mortgage rate drop

And following the special meeting today by the Monetary Policy Committee and its decision to make a 0.5% reduction in the Bank Base Rate, Halifax will be reducing its standard variable rate from 7.00% to 6.50%.

The 0.5% reduction will come into effect for borrowers, including tracker mortgage customers, from 1 November 2008.

The reduction for existing borrowers will come into effect at the same time as any change in savings rates on 1st November 2008. Full details of changes to savers rates will be announced later this month.

This is the first major cut announced by lenders and will be welcome news to those in the property industry.

Those in the property industry had made it clear that while the welcomed the rate cut lenders would have to pass on the benefits if it was to mean anything at all for the economy.

Peter Rollings, Managing Director of Marsh & Parsons appeared to be extremely relieved at the announcements:

"A half percentage point cut in the base rate should allow lenders to lower their pricing on a lot of their products – and for those on tracker rates, the pain relief should be almost immediate. They could be saving over £60 a month on a typical interest only £150,000 mortgage, and just under £50 a month off a repayment mortgage.