How will the interest rate cut affect your money Which? looks at the impact of the rate cut.

19 November 2008

bank of england

Two weeks ago the Bank of England’s Monetary Policy Committee cut the Bank's base interest rate by 1.50%, from 4.50% to 3.00%. That should have been good news for borrowers but which lenders are passing on the cut?

The rate cut is the biggest in the UK since a 2% cut in March 1981 - when the country was gripped by recession. It brings rates to their lowest level since 1955.

Following the rate cut Which? was among the many voices calling for banks to pass the cut on to their customers. When the government waded in mortgage providers began reducing their tracker rates.

So far Abbey has reduced its two-year fixed rate deals, some as low as 4.49 per cent. Cheltham and Gloucester’s two-year fixed rates are down to 4.89 per cent.

There has been some good news on tracker mortgages too. Cheltenham and Gloucester’s tracker range starts at 4.79 per cent for two years.

For those unable to get a tracker deal at the moment Abbey, Bradford and Bingley, Cheltenham and Gloucester, Coventry building society, Halifax, Lloyds TSB, Nationwide, NatWest, Northern Rock, Royal Bank of Scotland and Scottish Widows are all passing on the 1.5 per cent base rate cut to their standard variable rates (SVRs), with Nationwide building society offering the lowest rate at 4.69 per cent.

But for savers things don’t look so good as building societies began withdrawing saving products following the base rate announcement in order to reprice them, with banks then following suit.

Where to find best mortgage deals

Which? provides best buys for mortgage deals including:

  • The cheapest fixed-rate mortgage deals
  • The cheapest discounted-rate mortgage deals
  • The cheapest tracker-rate mortgage deals

You’ll also find help for the Which? Mortgage Finder, interactive tool allows you to compare mortgages from across the market.

Where to find the best savings deals

Which? searches the market to find Best Rate savings accounts. We also show consistent Best Buys - those accounts that have been Best Buys for at least twelve months. These save you the effort of switching to chase the best rates.

Which? Best Rate cash Isas compares cash Isas from across the market to find the ones with the highest savings rates - and we show which have been consistent Which? Best Buys for the last 12 months.

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