I am looking at a mortgage that tracks the Bank of Scotland Base Rate, and wondered how much this differed, and/or was likely to differ, from the Bank of England Base Rate?
2006-10-01 21:20:51 · 4 answers · asked by DTFC 2 in Business & Finance ➔ Personal Finance
Scotsman - Thanks for that, I always thought the same, until I got a mortgage quote from the Bank of Scotland, quoting that it tracks the Bank of Scotland Base Rate! That got me thinking!
2006-10-01 22:31:59 · update #1
Technically there is no longer something called the BoE Base Rate. It was the minimum lending rate, the base rate, the repo rate but is nowofficial Bank rate paid on commercial bank reserves. Same sh1t, different name!
For some years now, most banks have had their own base rate, but it has tracked the BoE prime rate on a daily basis. That is because the BoE may say the repo rate is 4.75%, but there may be market turmoil one day and BoS base rate or Barclays base rate may increase to reflect a higher cost of funding on the part of the lending bank in the wholesale market.
That said, these are rare occurrences. BoS will, in their ending documentation, tell you how they publicise any changes in their base rate.
2006-10-02 11:16:47 · answer #1 · answered by izzieere 5 · 1⤊ 0⤋
The Bank of Scotland is a commercial bank and part of the Halifax group. The Bank of England is not. It's a quasi-governmental body and the only one charged with setting interest rates.
2006-10-01 21:48:43 · answer #2 · answered by scotsman 5 · 1⤊ 0⤋
No. They are the same.
The two main rates used for borrowings are the (BOE) Bank of England rate, and the ECB (European Central Bank) rate.
2006-10-01 21:28:20 · answer #3 · answered by 'Dr Greene' 7 · 1⤊ 0⤋
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