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HSBC mortgages
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HSBC fails to pass on base rate cut to customers
Friday 21 November 2008
By Becca Talbot becca.talbot@consumerchoices.co.uk
Mortgage lender HSBC has said it will reduce its standard variable rate by only 0.81%, despite the 1.5% base rate cut last month.
Britain’s biggest bank, HSBC (www.hsbc.com) confirmed yesterday that it will not pass on the full Bank of England Bank of England base rate cut to borrowers on its standard variable rate mortgages.
HSBC said it will reduce its standard variable rate (SVR) by 0.81% from December 5 2008. The new rate will be 5.44%, down from 6.25%.
First Direct (www.firstdirect.com), HSBC’s online-only bank, has said it will also cut its SVR by 0.81%, to 4.69%.
HSBC is the only major bank not to pass on the full 1.5% cut in interest rates.
James Thorpe of HSBC said: “Our SVR is only paid by 1% of our customers, 95% of our customers on variable rate mortgages are on Standard, HSBC Homebuyer or tracker mortgages which all benefited from the full 1.5% cut.”
Immediately after the Bank of England announced the base rate cut, lenders were under enormous pressure to reduce interest rates. Halifax (www.halifax.co.uk), the UK’s biggest lender, Lloyds TSB (www.lloydstsb.com) and Bank of Scotland (www.bankofscotland.co.uk), announced that they would pass on the full 1.5% cut immediately.
Chris Eagle, commercial manager at CreditChoices.co.uk said of the news: “When the base rate cut was announced, HSBC said it would not be passing on any of the cut, so borrowers should welcome the fact that they have decided to pass on some of the cut.”
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