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Barclays also announces mortgage rate cut

Written by Roberta Murray

Wednesday, 08 October 2008

Barclay's Woolwich follows Halifax and cuts mortgage rates in line with bank cut.

Barclays (LON:BAR) has announced its mortgage lending arm Woolwich will be cutting its standard variable rate (SVR) by 0.5 per cent following the announcement today that the Bank of England base rate will fall by 0.5 per cent.

As well as the cut in SVR, all customers on base rate trackers will also see their rates cut by 0.5 per cent with effect from 1st November. For new customers, all rates will come into effect from tomorrow, Thursday 9th October.

Andy Gray, head of mortgages for the Woolwich, said: “The base rate cut is a welcome move for millions set against the background of a slowing housing market. Today’s move to reduce mortgage payments is good news and will instil confidence, helping customers with their finances.”

Halifax

Following the special MPC meeting 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.