Page last updated at 12:01 GMT, Wednesday, 15 October 2008 13:01 UK

Nationwide's mortgage costs cut

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Lenders have cut their rates by different amounts

Nationwide will pass on some, but not all, of the latest cut in interest rates to mortgage customers.

The UK's biggest building society will reduce its standard variable rate (SVR) by a third of a percentage point from 6.49% to 6.19% from 1 November.

A number of lenders have passed on last week's half a percentage point cut in the Bank rate to SVR mortgage deals.

But the wholesale cost of borrowing remains high and the availability of home loans continues to be tight.

Libor - the rate at which banks lend to each other and the key to mortgage costs - fell on Monday but remained well above the Bank rate, at 6.21%.

Matthew Carter, divisional director for mortgages at Nationwide, said that the lender was committed to providing "fair, affordable and sustainable mortgages".

The cut will decrease monthly repayments on a typical 150,000 SVR mortgage by 27.92 to 983.95.

Other lenders

Since last week's cut in the Bank rate by the Bank of England to 4.5%, a flurry of lenders announced they would pass on the decrease in full to SVR customers on 1 November.

They included Halifax, Lloyds TSB, the Woolwich, First Direct, Royal Bank of Scotland and NatWest, and were joined on Tuesday by the Co-operative Bank which will have a SVR of 6.49%.

But government-owned Northern Rock said it would be reducing its SVR rate by 0.15 of a percentage point, and HSBC said it was leaving its rate unchanged.

Most people find themselves on the SVR rate after their fixed-rate deal runs out.

A relatively small proportion of customers choose a SVR mortgage. Nationwide said that new borrowers who chose this kind of deal must now deal with them directly, rather than through an intermediary. They must also provide a deposit of at least 25%.

The number of mortgage deals on offer for new borrowers in general has fallen from 10,726 in mid-October 2007 to 3,281 a year later.


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