Nationwide Building Society, Britain’s third-biggest mortgage lender, today said it would cut its Standard Variable Rate (SVR) by 0.3 percentage points to 6.19 per cent, making it the lowest on the high street. The move follows last week’s half point cut in the Bank of England’s base rate.

Borrowers with a £100,000 repayment mortgage on Nationwide’s SVR will see their monthly payments cut by £18.61 to £655.97. Nationwide’s tracker mortgage rates are being cut by half a point in line with the base rate cut. A borrower with a £100,000 repayment mortgage on Nationwide’s two-year tracker rate will benefit from a reduction in monthly payments of just over £30.

Melanie Bien, of Savills Private Finance, the mortgage broker, said: “Nationwide’s SVR was already among the lowest in the market so I think it is fair that it hasn’t passed on the full half point percentage cut in base rate. The SVR is currently the lowest on the high street and not much higher than the rate offered on some trackers and two-year fixes.

“On the other hand the cut in the tracker rates has to be balanced against Nationwide’s decision earlier this week to raise the margin on its trackers by up to 0.61 percentage points. The net result is that many borrowers on Nationwide’s tracker loans will be no better off.”

On the same day that it raised margins on tracker rates, Nationwide also made life more difficult for borrowers with smaller deposits, by pulling all loans sold through brokers where borrowers could put down as little as a 10 per cent deposit. From now on these products will require a 15 per cent deposit.

Nationwide’s mortgage rate changes will take effect on November 1.

The Co-operative Bank said today it would be passing on the full benefit of the recent base rate reduction to its mortgage customers. It is cutting its standard variable rate (SVR) by 0.50 percentage points to 6.49 per cent, with effect from 1 November 2008.

Ms Bien added: “A number of lenders have still to declare their hand following last week’s cut in base rate. We just hope they will hurry up and decide by how much, if at all, they are cutting their rates.”

There are five million homeowners on variable rate mortgage deals, of which 800,000 are on their lender's SVR. There are 4.2 million people on tracker mortgages.

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