Interest Rate Cut Benefits Three of Northern Ireland's Big Four Banks

Strategic Insights -

Northern Bank and Ulster Bank customers will benefit from the 0.5% interest rate cut announced by the Bank of England, with their base rate and standard variable rate (SVR) mortgages being reduced. First Trust Bank will also pass on the cut to its base rate clients, although it has not yet decided on its SVR rates. Meanwhile, Bank of Ireland has not yet made a decision on the interest rate cut, with a spokeswoman stating that the decision is under review. The move is expected to save householders with a £100,000 base rate tracker mortgage approximately £30 a month.

Key Takeaways:

  • Three of Northern Ireland's big four banks (Northern Bank, Ulster Bank, and First Trust Bank) will pass on the 0.5% interest rate cut to their customers.
  • Northern Bank estimates that householders with a £100,000 base rate tracker mortgage will save approximately £30 a month.
  • Bank of Ireland has not yet decided on the interest rate cut, with a spokeswoman stating that the decision is under review.
  • Around 40% of borrowers in the UK have a tracker mortgage, with the majority of these automatically moving down in line with the 0.5% cut.
  • Around 300,000 borrowers with tracker deals, including Nationwide customers, will not see their rates fall due to collars.
  • Just under one million people on a SVR will discover over the coming days if they will financially benefit.
  • Lloyds TSB, Nationwide, and HSBC have already pledged to pass on the reduction to their SVR customers.
  • Just over half of the UK's 11.7 million households with a mortgage have a fixed-rate deal and will not benefit from the reduction.

Statistics:

  • £30: The estimated monthly savings for householders with a £100,000 base rate tracker mortgage.
  • £100,000: The estimated mortgage amount for homeowners who will benefit from the interest rate cut.
  • £204.47: The total amount saved by Northern Bank customers with a base rate tracker mortgage since October.
  • 0.5%: The amount by which the Bank of England has cut the base rate.
  • 1.5%: The new base rate after the cut, the first time it has ever fallen below 2% in the Bank of England's 315-year history.
  • 40%: The proportion of borrowers in the UK who have a tracker mortgage.
  • 300,000: The number of borrowers with tracker deals, including Nationwide customers, who will not see their rates fall due to collars.
  • 11.7 million: The number of households in the UK with a mortgage.

Sources:

  • Northern Bank
  • Ulster Bank
  • Bank of Ireland
  • Bank of England
  • The CBI business group
  • The UK Government