Mortgage lenders are cutting their rates across the board following the surprise announcement from the Bank of England this morning that it has cut the base rate by half a percentage point.
Halifax's rate cut is the same as that from the Bank; Halifax mortgage
deals will see a cut in the lender's standard variable rate from seven per cent to 6.5 per cent, which will come into affect for borrowers from November 1.
Barclays has slashed the same amount off the cost of borrowing from its mortgage arm, Woolwich. Existing customers will see the lender's SVR and tracker mortgage deals cut by 0.5 per cent with effect from November 1, while new customers will be able to benefit from the new rates as of tomorrow.
"The base rate cut is a welcome move for millions set against the background of a slowing housing market." said Andy Gray, head of Woolwich mortgages
. "Today's move to reduce mortgage payments is good news and will instil confidence, helping customers with their finances."Lloyds TSB mortgages
and, under Lloyds, Cheltenham & Gloucester mortgages
standard variable rates will also be reduced to reflect the full 0.5 per cent base rate cut, which brings their average rate down from seven per cent to 6.5 per cent, effective from November.
An estimated 11.7 million UK households on tracker mortgages stand to benefit from the Bank's Monetary Policy Committee's decision to cut rates today, providing all the mortgage
lenders follow suit and cut the cost of borrowing accordingly.
"Today's package of bank funding and capital measures is further strengthened by this rate cut." said Michael Coogan, director general of the Council of Mortgage Lenders. "Not only are the tripartite authorities now pulling together decisively to address domestic confidence, but international central bankers are also collaborating much more effectively on their position.
"All this decisive action augurs well for an improving market situation looking ahead," Mr Coogan added, but warned that the tough times for the British economy are not over yet.
Simon Rubinsohn, Chief economist at The Royal Institute of Chartered Surveyors (RICS), also welcomed the rate cut as "an appropriate response to the chaos in financial markets over the past few weeks and the global economy's slide into recession". But, he continued, while this will help to rebuild confidence, "more action will be necessary over the coming months."
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