Banks not passing on the interest cut

Lynn11

It is hot on the news today as only 3 banks have agreed to pass on the interest cut. What was the point of the BOE cutting it if the big banks will not pass this onto us as a consumer. Teh government cannot force this but it is so frustrating, Does not really affect me as I have a fixed rate until May 2009 but they say that lots of banks are withdrawing their tracker mortgages due to any further cuts,

TotallyBroke

Banks can withdraw any product at anytime. They don't have to give good deals as in Tracker mortgages at all. They could only offer fixed rate mortgages at ridiculous rates.
Just because only 3 have passed on the rate today does not mean that more will not do so on Monday. It's just a waiting game to see when they will do it. I'm pretty sure my provider will I'll expect the letter ready for December's payment telling me what the new amount will be.

Turtle

Banks borrow money from each other at the LIBOR rate, which they then lend to you. Not cutting the rates after a base rate drop does not necessarily mean they're making more profit, as this is likely to be a lower rate than they borrowed the money in the first place.

financialbliss

Looks like lenders are starting to announce SVR mortgage rate cuts:
http://news.bbc.co.uk/1/hi/business/7716086.stm

All 5 (at the time of me writing this) shown in the BBC article above have passed on the 1.5% cut.

Financial Bliss.

StuartGMC

financialbliss wrote: »

Looks like lenders are starting to announce SVR mortgage rate cuts:
http://news.bbc.co.uk/1/hi/business/7716086.stm

All 5 (at the time of me writing this) shown in the BBC article above have passed on the 1.5% cut.

Financial Bliss.

But effective from when? I think NatWest in my case will be 1 December, so a few weeks for me to see my effective interest rate drop to 2.17% due to the offset :rolleyes:

financialbliss

StuartGMC wrote: »

But effective from when?

Stuart,
Bottom of article - just below table or lenders / rates:

"SVR: Standard Variable Rate Any changes take effect from 1 December"

Financial Bliss.

StuartGMC

FB
Cunning aren't they to stretch out another month before changes apply?
I guess the Government may have applied more pressure if they waited longer, but I don't think it took so long in the past with rising rates for the new ones to be applied? :rolleyes: