Lenders fail to pass on full rate cut

Many lenders are refusing to pass on the full interest rate cut recently announced by the Bank of England.

Both Nationwide and Halifax have cut their basic standard variable mortgage (SVR) rates by just 0.1%, instead of the full quarter point cut announced by the Monetary Policy Committee.

The reduction means Halifax customers on SVR deals will see their mortgage rate reduce to 5.65%.

The 0.1% cut means Nationwide customers on its base mortgage rate (BMR) will see their borrowing rate cut to 4.64%.

Halifax defended its decision by saying house buyers were already benefiting from very low mortgage rates.

"Our base rate was already one of the most competitive in the marketplace...We need to balance the needs of borrowers and savers."

Halifax will announce its new savings rates before the end of February.