Rate cuts and the local banks

SteveyJC

Hi All,

Has anyone heard if the main local banks (eg Northern bank, Ulster bank, First trust) are matching the 0.5% rate cut for their tracker mortgages as announced by the bank of england on 5th March? Normally the local news reports it straight away, but this month I havent heard anything?

Many thanks, Stevey

NAR

SteveyJC, for a tracker mortgage unless they have clause in your contract to say otherwise, the banks are obliged to pass on the full 0.5%.
I think you are mixing up with variable rate mortgages where the banks have much more control over what rate they choose to set.

KiwiCoop

I suspect he means for new tracker mortgages not an existing one.

The Northern Bank's base rate only came down to 1% on 1st March so if it chooses to lower it again to follow Thursday's cut it might take a few weeks (and that's "if").

SteveyJC

No, I actually mean current trackers. If you notice the NB have a clause in their mortgage where it says it matches the northern bank base rate, not the BOE base rate!

I noticed they only lowered their rate from 01 March, so it will be interesting to see what thy do this time round.

Thanks all!

kudos

I'm with The Progressive. They've failed to pass on most of the rate cuts, normally you only get .25% rather than .5% normally claiming protecting savers or making sure they are in a good financial situation. With the Feb rate cut they passed none on.

I for one will be moving off them ASAP, even with a 1% redemption fee.

36square

Kudos
You confuse me. If your mortgage is on Progressive's SVR, why do you have a redemption penalty? Unless it's a tracker linked to the SVR which is nearly always a bad deal since you're at the mercy of the lender.

Kiwicoop
Much as a I despise the local banks and pity those who use them, it is normal practice for lenders to alter rates from the beginning of the following month. The only mortgage rate that might change immediately is one linked to Base Rate.

thriftyminx13

I don't think the banks can afford to pass on the cuts. anymore cuts to their own mortgage base rate tracker rates and they'd have to pay us! i didn't get anything else taken off my northern bank base rate tracker mortgage since jan/feb so maybe it's capped?

snowmen

if it bothers you that the main local banks aren't passing on the interest rates decreases then just move provider and look outside the "big" four. They are notoriously rubbish when it comes to customer services anyway.
I don't know why we have such loyalty to the n.i. banks over here anyway. Have a look at other options like abbey and nationwide. I know that nationwide have passed on interest rate decreases on their mortgages the following month.

NAR

thriftyminx13 wrote: »

i didn't get anything else taken off my northern bank base rate tracker mortgage since jan/feb so maybe it's capped?

Read your contract, by the sounds of things you will find the relevant clause.

Golden_Anemone

thriftyminx13 wrote: »

i didn't get anything else taken off my northern bank base rate tracker mortgage since jan/feb so maybe it's capped?

If there's a cap it will say so in your paperwork. I took my tracker mortgage out with NB about 18 months ago and it's not capped - they might have introduced one since to new loans.

What has happened I think is they didn't reduce the bank's base rate until 1st March. The previous rate cut they reduced it immediately (as requested by government to all the banks) so we saw payments drop almost immediately. I'm still expecting them to reduce my payment this month though it hasn't happened yet.

thriftyminx13

yeah i'm not worried if they reduce it or not. because i'm happy enough with my repayments but will look out the contract. i see ulster bank are passing on 0.25% of the cut to the base rate.