UK lenders cut mortgage rates after BoE move

Several of Britain's top lenders cut their variable lending rates by 25 basis points on Thursday, matching a move by the Bank of England to pass on some relief to homeowners facing a jump in mortgage costs.

HBOS, Barclays, Lloyds TSB and building society Nationwide said they would match the UK interest rate cut for their standard variable rates, effective from May 1 for existing customers.

Royal Bank of Scotland/NatWest and HSBC said they were reviewing their variable rates.

A quarter percentage point cut had been expected by economists as the BoE attempts to cushion the economy from the global credit crunch.

Base rate changes are not always passed on to customers as the cost of retail and wholesale funding has an effect.

The cut will save a borrower with a 150,000 pound 25-year repayment mortgage about 23 pounds a month, the Council of Mortgage Lenders estimated.

Michael Coogan, director general of the CML, urged more action. "We would like to see another base rate cut next month partnered with more liquidity auctions, of higher amounts, over longer terms, and available to a wider range of institutions."