The Bank of England cut the base rate of interest to a record low of 0.1 per cent in March but several lenders have yet to reduce their mortgage standard variable rates.
The base rate was cut by half a percentage point from 0.75 per cent to 0.25 per cent on 11 March, the same day as Chancellor of the Exchequer Rishi Sunak’s Budget, in a bid to try to stem the economic fallout from the coronavirus pandemic.
It was then cut again from 0.25 per cent to 0.1 per cent on 19 March.
Not all lenders have passed on both cuts to their standard variable rate (SVR) customers. This is the rate you usually move onto once your fixed, discounted or other mortgage deal comes to an end.
Here’s the OnTheMarket rundown of which ones have – and haven’t – passed on recent rate cuts.
Mortgage lenders which have passed on interest rate cuts during coronavirus
Lloyds Bank and Halifax, which is a subsidiary of the Lloyds Banking Group, have cut their standard variable rates twice in response to the latest interest rate reductions.
They fell from 4.24 per cent to 3.74 per cent following the March 11 rate cut, and then to 3.59 per cent after the March 19 cut. Nationwide Building Society, TSB, NatWest and Royal Bank of Scotland similarly have also all reduced their SVRs twice, and they currently all stand at 3.59 per cent too.
HSBC and Santander have passed on both rate cuts as well, with HSBC reducing its SVR twice, first to 3.69 per cent and then 3.54 per cent, while Santander cut its SVR first to 4.49 per cent and then to 4.34 per cent.
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Rather than making two rate cuts, some mortgage providers, including First Direct, Aldermore and Metro Bank passed on both cuts at the same time, reducing their SVRs by 0.65 of a percentage point following the Bank of England’s 19 March base rate reduction.
First Direct’s SVR is now 3.54 per cent, while Aldermore and Metro Bank’s SVRs are 4.58 per cent and 3.60 per cent respectively.
Most of these cuts came into effect on 1 April, but where lenders have cut rates twice, sometimes the second reduction won’t come into effect until the beginning of May. Your lender should write to you to let you know when your rate will fall.
Mortgage lenders which have yet to pass on interest rate cuts during coronavirus
Although most of the biggest lenders have reduced their SVRs in response to recent base rate cuts, many mortgage providers have yet to act.
These include intermediary only lender Accord, Coventry Building Society, Leeds Building Society, Sainsbury’s Bank, Skipton Building Society and Yorkshire Building Society.
Hinckley and Rugby Building Society, Marsden Building Society and Kent Reliance have also left their SVRs unchanged, and all three of them are currently higher than six per cent, making them amongst the most expensive SVRs currently available.
Remortgaging during the coronavirus pandemic may be the best option
Even if your lender has passed on both base rate cuts, their SVRs will still usually be much higher than other mortgage rates, so you may be able to cut your costs significantly by remortgaging.
Bear in mind too that lenders often don’t pass on rate cuts immediately, so there’s a chance that others may act in weeks to come.
This is not an exhaustive list, so if your lender isn’t shown here, check with them directly to see if your rate has reduced.
OnTheMarket has a dedicated page for coronavirus information and advice.
