Banking giants Santander, Lloyds and Halifax have moved their rates to help mortgage borrowers by passing on the full Bank of England 0.5 per cent interest rate cut.
Outgoing governor Mark Carney gave his response to the coronavirus crisis as he unveiled an emergency package to stave off recession.
The central bank slashed interest rates from 0.75 per cent to a record low of 0.25 per cent, which will drive down the cost of borrowing for millions of household.
Mr Carney yesterday said other banks had no excuses if they opted not to mirror the move.
He said: ‘We expect them to treat customers fairly — that’s what must happen. They know that.
Santander will drop its Standard Variable Rate to 4.49 per cent from April, with the 0.50 per cent reduction to be reflected across its products linked to base rate including its Follow-on Rate (stock image of a Santander branch above)
Mark Carney (pictured above) yesterday gave his response to the coronavirus crisis as he unveiled an emergency package to stave off recession.
‘The Bank of England and the Financial Conduct Authority will be watching this very carefully.’
But leading lenders Santander, Lloyds and Halifax have risen to the occasion and passed on the full rate cut.
Nationwide, Barclays and TSB have also made the commitment.
The move by some of the biggest lenders in the country comes after the coronavirus wiped another £112 billion off London markets, after the FTSE opened 6 per cent down this morning.
Markets have been jittery over the last few weeks as coronavirus continues to sweep across the UK.
TODAY AND YESTERDAY: The FTSE plunged on opening today after falling again yesterday
THIS WEEK: The FTSE has dropped throughout the week after a big fall on Monday morning
So far there have been 590 confirmed cases in the UK and ten deaths.
In response to the Bank of England’s announcement, Santander will drop its Standard Variable Rate to 4.49 per cent from April, with the 0.50 per cent reduction to be reflected across its products linked to base rate including its Follow-on Rate.
Head of Mortgages at Santander Bradley Fordham said: ‘Following yesterday’s announcement from the Bank of England of a reduction in base rate, we are pleased to be able to announce a cut in our SVR from the beginning of April.
‘We will be reviewing other rates in the light of the current climate. Any changes we make will be communicated to customers and we will focus on continuing to offer our customers long term value through the range of products and benefits we provide.’
The Co Op Bank also announced it would reduce its Standard Variable Rate (SVR) by the full decrease, adding that it would also apply the rate to its tracker mortgages.
As well as this the firm is planning to review its savings rates and reassured customers that it had measures in place to support its customers through the coronavirus outbreak.
It said it would working with its small and medium sized businesses to help guide them through the ‘challenging time’.
Lloyds Banking lent over £13 billion to first time home buyers in 2019 and also revised its rates.
Halifax is also part of the group and two of its mortgages would be reduced along with the Lloyds products.
The group added it would be contacting customers individually to let them know the impact on their mortgages and said it would also be reviewing its savings rates, but that these would not be reduced by as much as the full reduction bank rate.
Customers that have a mortgage that tracks the bank rate will see the reduction by 1 April.
A spokesperson for Lloyd’s said that the Halifax Homeowner Variable Rate, the Halifax Standard Variable Rate currently, the Lloyds Bank Homeowner Variable Rate and the Lloyds Standard Variable Rate, would all be reduced by 0.50 per cent.
They added: ‘Our focus and priority remains on supporting our customers through this uncertain time. The changes we will make to rates will accompany the temporary support measures we are offering such as payment holidays, emergency access to fixed term savings and no fees on missed payments.’
With Lloyds customers having to wait until next month for the rate cut to come into effect, Redwood Bank has immediately passed the reduction onto its customers.
This will apply to its existing lending customers and Gary Wilkinson, chief executive officer and co-founder of Redwood Bank, said: ‘Yesterday’s Bank of England Base Rate announcement is positive news for the UK economy, as it’s going to help tackle the economic implications of coronavirus.
‘Almost all of our mortgage products are bespoke to meet the individual needs of clients and have variable rates linked to Base Rate. We have therefore decided to cut our mortgage rates by 0.5 per cent, which we believe our customers will hugely benefit from.’
Barclays has also planned to reduce its variable tracker rate mortgages by 0.50 per cent on April 1.
TSB will also be decreasing the interest rates on its variable rate mortgages, credit cards and variable rate business lending accounts by 0.50 per cent, this will also be implemented on April 1.