HSBC joins the cutters

HSBC have finally responded to the Bank of England's recent 0.25% interest cut, announcing their intention to cut their standard variable mortgage rate by 0.15%, to 4.6%.

Their 0.15% cut, the same as Abbey National's and Standard Life's, falls roughly in the centre of the reductions offered by mortgage lenders since the base rate cut. Halifax, the UK's biggest mortgage lender, and the rest of the HBOS group, all cut their rates by just 0.1%, a move later imitated by Nationwide. Only smaller lenders such as Sainsbury's and Virgin extended the entire 0.25% cut to their borrowers.

Holders of the HSBC Home Buyer mortgage will be pleased to learn that, from March 5 when the cut comes into effect, they will hold the lowest variable mortgage rate available from any of the major high street lenders. Nationwide, previously the best high street buy, clocks in at 4.6%, after which there is a significant jump to Halifax with 5.65% and Abbey National at 5.79%.

The bank also announced a savings rate cut today, but avoided the criticism levelled at the other banks and building societies by reducing them by the same amount as the mortgages: 0.15%. Internet bank Egg came under fire yesterday for cutting its mortgage rates by 0.15% but its saving rates by the full quarter.

Says Tony Ashford, general manager for personal banking at HSBC Bank: "We've tried to strike a fair balance between the interests of borrowers and savers. From March, HSBC will once again have the lowest variable mortgage rate on the high street, while at the same time, the rates we pay to most HSBC savers will fall by less than the Bank of England's 0.25% base rate cut."