Lloyds TSB and C&G pass on 1% base rate cut

Lloyds TSB and C&G will pass on today's base rate cut in full to existing variable and tracker customers, following the decision by the Bank of England to cut base rate by 1 per cent.

The bank was the only lender to commit to passing on any rate cut in full in advance of today's decision. On January 1 Lloyds TSB will automatically cut its standard variable mortgage rate by the full 1 per cent, to a new rate of 4 per cent.

Because the lender has no collar on its tracker products, all existing tracker customers will also benefit from the rate cut from 1 January.

Stephen Noakes, C&G marketing director, said "In the last two months alone we've passed on the full 2.5 per cent fall to our existing tracker and variable customers, so many homeowners will start the new year with some much needed extra cash available.

Today's decision will no doubt have a positive impact on wholesale funding costs. From tomorrow we are reducing rates on our fixed rate products and will be reintroducing a re-priced tracker range early next week, so new customers will also benefit."

New fixed rates

From tomorrow, Lloyds TSB and C&G will reduce rates on fixed rate mortgages, with rates starting from 3.89 per cent.

The lender is also introducing a new range of ten year fixed rate products, with rates starting at 4.99 per cent for 60 per cent LTV. This new range is specifically designed for homeowners looking to take long term advantage of today's lower rate environment.

Stephen Noakes continues; "As SWAP rates are set with future anticipated base rate cuts priced in, there is speculation that the market is starting to bottom out. Now is a good time for homeowners to take advantage of the current low rate environment by locking and enjoying the security of a competitive rate for the next decade"

Following today's rate cut, the lender is currently re-pricing its tracker range and will be re-launching a new range early next week.