More Lenders Reduce Mortgage Rates

Posted 2007-12-18

Two lenders have announced a reduction in mortgage rates in response to recent cuts by the Bank of England. 

Standard Life Bank will drop its Freestyle standard variable rate (SVR) to 7.21 percent, a cut of .25 percent, beginning January 1, 2008. 

HSBC announced that, beginning December 24, 2007, it will lower its variable mortgage rate from 7 percent to 6.75 percent. 

HSBC cut the rate on its tracker mortgage almost immediately following the Bank of England’s decision on December 6 to cut the rate. The bank claims its variable mortgage rate is at least .24 percent lower than many other high street lenders as a result of its latest reduction. 

According to Moneyfacts, the online financial comparison website, 31 lenders have announced changes to their SRVs following the interest rate cut.  Six providers reduced their rates by less than .25 percent. 

The most recent rate reduction compares unfavorably to cuts made in August 2005, the last time the Bank of England lowered rates, according to Lisa Taylor, an analyst for Moneyfacts. 

At that time, 46 lenders announced rate cuts, so the present rate of change seems slow in comparison, says Taylor.

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