Sometimes we here at www.247Moneybox.com go all a bit highbrow and the topic of discussion in the office today has been the latest, albeit expected, cut in the Bank of England (BOE) base rate. The members of the monetary policy committee agreed to cut interest rates another 0.5% in the latest round of slashing rates since last autumn. The base rate is now just 0.5% so is that good news all round?
Well, yes and no. Yes if you are on tracker mortgage that follows the BoE base rate, however even this has a caveat as this article in the Guardian points out. If your mortgage is linked to your lender’s standard variable rate (SVR) you will find they are not contractually obliged to pass on the cut, but some have already announced they will do so. A handful of banks have to cut rates because their terms and conditions state that the difference between their SVR and the base rate cannot exceed a certain level. Lloyds TSB and Halifax, Nationwide and Skipton building societies are in this position. So good news if your mortgage is with them.
It’s certainly not a good thing if you are a saver. Moneyfacts.co.uk estimates that after last month’s cut, 86% of savings providers cut their rates by the full 0.5% or more. The latest reduction will mean already downtrodden savers will receive even less interest.
Probably the most interesting thing to note is that rates on loans and credit cards are not really related to interest rate cuts. In fact, rates on these products have been slowly increasing over last year as institutions tighten their lending criteria. A year ago the average credit card rate was 16.8%, compared to 17.7% now.
We here at 247Moneybox.com haven’t changed our rates at all and clearly set out what your charges will be over the life of your cash advance. That’s important for everyone as we want everything to be clearly out in the open and for you to not have to worry about the Bank of England and the MPC with relation to your 247Moneybox loan.
Tags: Bank of England, Cash Advance, Interest rates, Loan, Loan Till Payday
