Lloyds TSB and C&G cut mortgage rates

Lloyds TSB and Cheltenham & Gloucester will pass on today's base rate cut to existing variable and tracker customers, following the decision by the Bank of England to cut base rate by 0.5 per cent.

On February 1st, Lloyds TSB will automatically cut its standard variable mortgage rate by the full 0.5 per cent, to a new rate of 3.5 per cent. The bank was the only lender to commit to passing on any rate cut in full in advance of today's decision.

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

Stephen Noakes, C&G marketing director, said; "Today's rate cut is a further £40 in the pocket of our average variable or tracker customer next month. With rates at a historic low, we would encourage mortgage holders to consider making overpayments if they can afford it. Overpaying today will reap the benefits in the future by reducing the length of your mortgage term."

Reduced new mortgage rates

Following the base rate cut Lloyds TSB and C&G is reviewing its fixed and tracker rates and will launch new prices next week.

Stephen Noakes continued; "It's our belief that wholesale markets have already factored in future base rate cuts and funding costs are unlikely to fall much further over the coming months.

We're now more or less at the bottom of the market and those looking to remortgage can take full advantage by locking in for as long as possible. We're offering a ten-year fixed rate to give customers maximum value in this low rate environment."