Britannia passes on 0.5% rate cut
Updated on 10 October 2008
Britannia has became the first building society to pass on this week's 0.5% rate cut to its mortgage customers.
The lender, which is the UK's second biggest building society with 250,000 borrowers, said it will cut its Standard Variable Rate (SVR) by half a point from November 1.
Rivals including Nationwide and Yorkshire Building Society have yet to make an announcement.
Britannia's move follows a similar 0.5% cut from the start of November promised by most of the UK's major banks including Halifax, Lloyds TSB, the Woolwich, First Direct, and Royal Bank of Scotland.
Nationwide, the UK's biggest building society with 1.4 million borrowers and nearly 10% of the mortgage market, said: "We are monitoring the markets and will make an announcement in due course."
Yorkshire, which has 180,000 borrowers, said no decision had been made but added that "all rates were under review".
The Building Societies Association said members' mortgage rates depended on a range of factors, not just bank base rates.
A spokesman said: "There are a number of issues which impact on the rate which societies charge, not least of which is the money market rate rather than the bank rate."
Despite the base rate cut and the billions of pounds that have been pumped in to money markets by the Bank of England, overnight lending rates between banks jumped 0.4% to 5.81% today. Three-month lending rates - a key measure in pricing mortgages - also rose again to 6.285%, nearly 2% above base rate.
Other lenders who have yet to announce rate decisions include Abbey, Government-owned Northern Rock and Bradford & Bingley.
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