Mortgage repayments - how much will you save?

The Bank of England's surprise cut to interest rates from 4.5 per cent to 3 per cent is great news for homeowners with tracker-rate mortgages, which are directly linked to the base rate. Borrowers on Standard Variable Rate (SVR) mortgages will have to wait to see if, and by how much, their lender cuts their rate.

Here is a table explaining how your monthly repayments could be affected by a change in your mortgage interest rate. (Repayment mortgages only).

Below that is a list of which lenders have cut their SVRs so far. (And which haven't).

Interest rate (old rate, new rate)	Monthly repayment on £100,000	Monthly repayment on £150,000	Monthly repayment on £200,000
4.5% - 3%	Old repayment: £555 New repayment: £474 Saving: £81	Old repayment: £833 New repayment: £711 Saving: £122	Repayment: £1,111 New repayment: £948 Saving: £163
5%- 3.5%	Old repayment: £584 New repayment: £500 Saving: £84	Old repayment: £876 New repayment: £750 Saving: £126	Old repayment: £1,169 New repayment: £1,001 Saving: £168
5.5%- 4%	Old repayment: £614 New repayment: £527 Saving: £87	Old repayment: £921 New repayment: £791 Saving: £130	Old repayment: £1,228 New repayment: £1,055 Saving: £173
6% -4.5%	Old repayment: £644 New repayment: £555 Saving: £89	Old repayment: £966 New repayment: £833 Saving: £133	Old repayment: £1,288 New repayment: £1,111 Saving: £177
6.5% - 5%	Old repayment: £675 New repayment: £584 Saving: £91	Old repayment: £1,012 New repayment: £876 Saving: £136	Old repayment: £1,350 New repayment: £1,169 Saving: £181
7.0% - 5.5%	Old repayment: £706 New repayment: £614 Saving: £92	Old repayment: £1.060 New repayment: £921 Saving: £139	Old repayment: £1,413 New repayment: £1,228 Saving: £185
7.5% - 6%	Old repayment: £738 New repayment: £644 Saving: £94	Old repayment: £1,108 New repayment: £966 Saving: £142	Old repayment: £1.477 New repayment: £1,228 Saving: £249
8% - 6.5%	Old repayment: £771 New repayment: £675 Saving: £96	Old repayment: £1,157 New repayment: £1,012 Saving: £145	Old repayment: £1,543 New repayment: £1,350 Saving: £193
8.5% - 7%	Old repayment: £805 New repayment: £706 Saving: £99	Old repayment: £1,207 New repayment: £1,060 Saving: £147	Old repayment: £1,610 New repayment: £1,413 Saving: £197
9% - 7.5%	Old repayment: £839 New repayment: £738 Saving: £101	Old repayment: £1,258 New repayment: £1,108 Saving: £150	Old repayment: £1,678 New repayment: £1,477 Saving: £201

Compiled by Lauren Thompson and Laura Whateley

Lenders that have cut their SVRs by 1.5%

Lloyds TSB/ Cheltenham & Gloucester/ Scottish Widows

Abbey

Nationwide

Natwest

RBS

Northern Rock

Halifax

Lenders that have not cut their SVRs so far

HSBC

Alliance & Leicester

Barclays

All other banks

All other building socieites

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Comments

[Edward Bancroft]

As a net saver, if the saving rates come down by the same amount, Gordon Brown and the BoE have just cost me £3,000 per year.

What about also now giving tax relief on savings, so that we can all benefit from the latest move on rates?

[Redmond]

"Analysts" always describe the impact of interest rate changes on either savers or borrowers.
Many people are both savers and borrowers. I am.
This 1.5% cut in base rate saves me £6.50 per week.
Wow! That is really going to have a seriously beneficial effect on my domestic and business prospects.

[David]

For the sake of balance, can we have an article aimed at savers titled "Interest rates fall, how much will you loose?"

[Al]

I'm a saver, so I will lose.

[James Brooks]

Since the majority of UK citizens, and adults, are *net savers*, then these interest rate reductions will leave the majority of the population *worse off*.

The angle the media take of suggesting that "interest rate cuts = good news" is therefore misplaced.

Interest rate cuts such as these reward the same reckless borrowers, living beyond their means, and unable to fully repay their debts, who are the very cause of our current crisis.

[Richard]

How about a page on "How much will I lose?" for the unfortunate saver. I'm sure the full reduction will be passed onto us whatever happens to the borrowers' rate.

[Tony Gyles]

I have a fixed rate mortgage, which I paid extra to setup. I save nothing from this decrease, but I gain the anxiety of wasting money on fixed rate deal and my monthly lose.

[Roy thurston]

Having been bailed out by the taxpayer, the banks' reluctance to pass on the base rate cut to borrowers looks like profiteering. How much will they cut the interest paid to depositors? at least 1.5 % I expect. The only beneficiaries of the this base rate cut will be the bank shareholders - and hence the senior management via bonuses.

[noughtpointzero]

@Edward Bancroft- well of course ISAs are tax free, but I take your point, it would be good if all savings were tax free. And the cap on the maximum size of an ISA could definately be increased.

Are there really that many people on SVR mortagages? And if so, why? Why on earth don't they get a tracker (like me) or at least a fixed? SVR will always be the most expensive.

[James Brooks]

@Roy Thurston, you're mistaken re your "profiteering" comment. The banks' cost of funding is not the BoE base rate, it's LIBOR. Your phrase "not passing on" therefore is awry, since the banks are paying considerable more than BoE base rate for their funds. If they were to borrow at LIBOR but lend at BoE base rate, they would lose money and even more banks would be bust.

The purpose of the "bail out" was to restore the banks' capital position, to prevent them failing. In the longer term that will allow them to function more normally, when market conditions also return to normality.

In the meantime, they need to make money on their existing business by widening the margin between what they borrow at (LIBOR) and what they lend at (e.g. mortgage rate), plus tighten future lending criteria so that risky borrowers are avoided. That way they won't go bust, their balance sheets will be restored, and life for all of us can return to normal, eventually.

[Father Ignatius Brown]

Don't panic all you prudent savers and renters - you made the right call and will be vindicated - just let the snowball work in your favour.

Renters can sit back and relax even with the latest cut in interest rates on their savings. If you rent a house and your rental payments are less than your mortgage payments on an equivalent property you are quids in - particularly as house prices are falling by on average £900 a week - for renters that is effectively an untaxed gain of £900 a week! That is not going to turn anytime soon despite the desperate urgings of Mandy and Gordon.

Furthermore, although you may only be getting a couple of percentage points on your cash savings the same price deflation is going to hit a whole range of other goods (particularly cars) - so hold off buying for 6 - 12 months and you will be earning a much higher real rate of interest since in six months you will be able to buy pretty much everything much cheaper than you can today.

Look for the real bargains next year - this year just hold on to your hats and save like crazy.

[bill]

There are still plenty of savings accounts offering 6% or even 7% if you are prepared to leave your money there for a year. So in the same way that the rate cuts have not been passed on to borrowers, neither have they been passed on to savers. In fact, you could even try remortgaging with Loyds and just dump the money in one of Nationwide's savings accounts - you might make a profit!!!

[m collins]

'Mortgage repayments - how much will you save?'

'Savings rates - how much will you lose???!!!'

Why should savers again be expected to subsidise over-valued assets and over-borrowed householders?

[Bob]

So much anger and stress in these comments! This will blow over. The thing to do is CHILL. Worrying etc. is bad for your health, guys...

[Chris Buttrick]

You deserve to have it all now. Take more credit, look how cheap it is to borrow. Ooops the bubble burst, pass me the puncture kit. Easy does it now - it looks like it is holding. Right lets pump away.
You deserve to have it all now....
Can we please, please take the time to learn from our mistakes?

[Colin]

@noughtpointzero

There will be an increase in the number of people on SVR, unable to get onto tracker or fixed mortgages as their loan-to-value will be less than 90%. Given that prices have now dropped by 15% YoY, many people who bought within the last 2-3 years will be in negative equity, or close enough to it to prevent them taking out a new mortgage.

[jonny bard]

If you have so much savings, isnt it better to pay off your mortgage? The interest on your mortgage is much higher than the interest on your savings gives you. Even better try a current account mortgage.

[Sean]

There's a press release dated 6 November on Nationwide's website saying they're passing on the full rate cut to borrowers with tracker mortgages.

[Darius Midwinter]

Your all missing the bigger picture - lower interest rates should help oil the system so the SMALL BUSINESS ENTREPENEUR will benefit, thus helping to keep unemployment low - all benefits, pensions etc depend on this - no taxpayers, you’ll ALL suffer.
Lower savings returns are a small price to pay to keep the ship afloat. House prices will still fall, however, we really need them to be HALF of their obscene PEAK "value".
Any money made, as liquid by house sales should have been seen as unearned income that would have kept prices capped and sensible.
The 12 years of greed has to now be paid for, even by the thrifty, unfortunately.
Who said life was fair?!!!

[Yvonne Pycroft]

Yet again Barclays/Woolwich lag behind the others. They just do not care about the small individual account holders. Always slow to react. Why are they not dropping their rates- just too greedy as per usual.

[Tom Bell]

Hope this isn`t too long! We have had a mortgage with Halifax since 1992 (£87.500)When int` rates fell by .5% our tracker rate was reduced by £22.09, when rates fell by 1.5% our rate fell by £32.66.We expected a much bigger reduction, possibly as much as £85.00! We complained to Halifax, they were adamant.Can you please confirm who is right please, if we are, would you kindly give us some supporting figures, as we feel short changed?We have a mortgage which is interest calculated daily and we always overpay and usually 3 weeks ahead of due date.9 years left and £45.000 o/s. Thanks,
Tom, Rugby.