Mortgage customers and savers benefit

4:14pm Friday 7th March 2008

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A LOCAL building society has announced it will be passing on a reduction in the Bank of England base rate to its variable mortgage rate customers, as well as pledging to return around £800,000 to its savers.

Following the 0.25 per cent reduction to the base rate on February 7, Cumberland Building Society decided to pass on the saving to its customers and tomorrow (Saturday) it will reduce its standard variable mortgage rate to 6.74 per cent.

This will save a customer with an £80,000 repayment mortgage approximately £12 a month.

The development follows the Society's decision to pass on the previous reduction to the base rate in December 2007, while pledging not to reduce savings rates until April 1 this year -unless there was a further reduction in the base rate before then.

In line with this, the Society has decided to defer the second reduction to the savings rate until April as well, which will see a combined total of £800,000 returned to its savers.

Kevin Parr, chief executive of Cumberland Building Society, said: "One of the advantages of being owned by our members, is that we do not have to maximise profits for external shareholders. This allows us to put our members first and ensure that both our savings and mortgage rates are as competitive as possible."