Banks outline how base rate cut will affect customers

Banks have started to outline what impact Thursday’s base rate cut will have on their customers.

Two emergency rate cuts by the Bank of England within days of each other have pushed the base rate to a new low of 0.1%.

The rate cut means some borrowers on variable mortgage rates will see their payments reduce.

But savers could see their returns chopped further, depending on what providers decide to do.

Bank of England
The Bank of England has slashed interest rates to 0.1% (Kirsty O’Connor/PA)

HSBC UK said there will be no changes to its current range of savings products, although these are under review.

HSBC UK is further reducing its variable rate mortgages. Rate cuts include lowering its standard variable rates (SVRs) by 0.15% alongside all on-sale and off-sale tracker rates reducing by 0.15%.

The changes mean HSBC UK’s residential SVR will reduce from 3.69% to 3.54%.

HSBC UK’s buy-to-let SVR is being cut from 4.75% to 4.60%.

Michelle Andrews, HSBC UK’s head of buying a home, said: “Reducing the rate of our SVR and tracker rate mortgages will provide additional relief for those on variable rate mortgages.”

Santander also said it would be passing on the full rate cut to its SVRs and its mortgages which directly track the base rate.

The bank’s SVRs will reduce to 4.34% in May.

Santander is reviewing the pricing of its variable rate savings products and said it will communicate any product changes to customers in line with their terms and conditions.

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