Lenders move quickly to pass on savings to borrowers
Nationwide Building Society has announced it will lower its standard mortgage rate by 0.25 percentage points to 6.74%, effective from September 1.
The latest pricing change follows the Bank of England’s decision to cut the bank rate by 0.25%. Tracker mortgage rates for existing Nationwide customers will also decrease in line with the bank rate from the same date.
Virgin Money and Clydesdale Bank are also adjusting their variable mortgage rates after the base rate change from 4.25% to 4%.
From August 21, Virgin Money’s standard variable rate (SVR) will drop from 7.24% to 6.99%, while its buy-to-let variable rate will fall from 7.74% to 7.49%.
Clydesdale Bank will implement similar reductions, with its SVR moving to 6.99%, offset variable rate to 7.14%, and buy-to-let variable rate to 7.49%. Updated tracker rates reflecting the new base rate will be available from August 8, with no change to the tracker differential.
When the Bank of England lowers its base rate, lenders typically reduce their variable and tracker mortgage rates. This is because the cost of borrowing for banks decreases, allowing them to pass savings on to customers. Standard Variable Rates and tracker mortgages often move in line with the base rate, while fixed rate mortgages may also become cheaper if market expectations shift. However, the extent and speed of rate changes can vary by lender and product.
Meanwhile, Buckinghamshire Building Society also announced rate reductions earlier in the day, cutting rates by up to 40 basis points across its limited company buy-to-let and holiday let products.
The five-year fixed limited company buy-to-let rate now starts at 5.99%, down from 6.39%, while a new two-year discounted option is available at 5.79%. Other reductions apply to expat and holiday let products. All limited company products carry a flat fee of £1,500, with a 125% interest coverage ratio for applicants.
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