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27 Jan 2021


Base rate update – two weeks on from the base rate cut of 0.25%

Julia Harris, analyst at Moneyfacts.co.uk – the leading independent financial comparison site, comments on the changes in the mortgage and savings market two weeks on from the base rate cut of 0.25% on 6 December.


  • “At long last there is scrap of good news for borrowers on variable rate mortgages linked to standard variable rates, with just over 50% of mortgage providers (53 lenders) having already signalled their intention to cut rates.
  • 23% of providers that have reduced their rates have reduced them by less than 0.25%. The list includes Northern Rock which cut by 0.15% and Cheshire BS which dropped its rate by 0.20%.
  • 10 lenders have reduced their standard variable rate below 7%, with Stafford Railway BS currently the lowest in the market at 6.34%.
  • 21% of those that have announced changes will delay the change of rates for new borrowers to the start of next year.


“It is important to look at how many products that some lenders currently offer are linked to standard variable rates. Many of the larger lenders have been quick off the mark to drop their rates by the full 0.25%. If you look at little more closely, you will discover that many of these don’t currently offer many new products linked to SVR. Halifax, Nationwide, Cheltenham and Gloucester and Northern Rock don’t offer any products linked to their own standard variable rates at present, leaving only Abbey from the top five lenders with seven products linked to SVR.

“We are still waiting on a number of the lenders that offer the larger range of SVR linked mortgages, such as Leeds BS, Cumberland BS and Norwich and Peterborough BS to announce their decisions. Some borrowers were anticipating some good news will have to be patient for a little longer until they find out their revised monthly repayment.

“Those looking to take out a variable rate mortgage need to be aware that this is a time where the market is in a state of flux. One rate may look better than another simply because it has taken a cut and another hasn’t. If you can hang in there a further two weeks until things have settled down, it will be easier to work out which are the best deals.”


  • 44 providers have announced rate cuts since the base rate cut, 38% of those offering variable rate savings accounts.
  • 24 providers have reduced rates by the full 0.25%.

“These changes are more or less as expected. A few more smaller institutions have reduced their rates earlier, perhaps because they are coming to year end and wanting to have their books in order before the Christmas break.

“Also worth a mention are two of the smaller building societies, Cumberland BS and Chesham BS, which have bucked the trend by formally announcing that they will not be reducing savings rates this time.” 


About The Moneyfacts Group

Moneyfacts is recognised as the UK’s leading provider of independent personal finance information. For the last 20 years, Moneyfacts’ information has been the key driver behind many personal finance decisions, from the Treasury to the high street.



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