Mortgage lenders cuts rates post Skipton shock

January 20th, 2010 Admin Leave a comment Go to comments

Taxpayer-owned Northern Rock and the Post Office both launched a range of cheaper mortgage deals.

Both could take advantage of Skipton’s shock decision on Wednesday to increase its standard variable rate (SVR) from 3.5pc to 4.95pc, ripping up an agreement that this rate would not be more than 3pc above the Bank of England base rate.

Skipton’s decision shows how low interest rates carry a sting in their tail How will Skipton’s interest rates change affect you? Skipton finds doors are closed to them What does Skipton’s handbrake turn on mortgages mean for building societies? Skipton slaps extra £2,000 on mortgage bills Bank of England interest rate cut: Era of interest-free mortgages looms, experts predict

Skipton, Britain’s fifth biggest building society, claimed ‘exceptional circumstances’ forced it to renege on the deal with thousands of loyal mortgage customers.

But such circumstances have not affected the Bank of Ireland, which offers mortgages for Post Office customers.

On Thursday, it dropped the cost of both its lifetime tracker deals. They have fallen from 3.29pc to 2.99pc and from 3.59pc to 3.49pc depending on the size of customers’ deposit. Bank of Ireland also dropped its competitive five-year fixed rate by 0.5pc to 5.25pc at the same time.

Northern Rock, which is publicly-owned, has also tweaked its rates. It has a two-year fixed rate deal of 3.69 pc, down from 3.89pc.

Ray Boulger, at John Charcol, said: ‘There will be a lot of disgruntled Skipton customers heading for the door.’

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