Lifetime BOE tracker rate down

Cus

My bank is offering me a lower rate on my current lifetime tracker, from 1.1 above base rate to 0.95 above base rate. All other details are the same. Why would they do this? What's the catch?

dunstonh

Cus said:

My bank is offering me a lower rate on my current lifetime tracker, from 1.1 above base rate to 0.95 above base rate. All other details are the same. Why would they do this? What's the catch?

They would do it on the basis of how much business they wish to attract at that pricing and what financing arrangements they have in place.  Broadly speaking, the higher the base rate, the lower the additional margin needs to be.

There have been base plus 0.5% in the past.  So, 1.1 to 0.95 is not a particularly notable change.   

K_S

Cus said:

My bank is offering me a lower rate on my current lifetime tracker, from 1.1 above base rate to 0.95 above base rate. All other details are the same. Why would they do this? What's the catch?

@cus Probably a commercial decision. Given the upward trajectory in the vase rate, they might've been losing lifetime tracker customers to fixed/variable rates with other lenders hence trying to retain their existing customers on lifetime trackers by sweetening the deal.