Lloyds TSB and C&G to pass on any rate cut

Lloyds TSB and Cheltenham & Gloucester will pass on any base rate cut to existing variable and tracker customers.

If the Bank of England cuts the base rate on Thursday; the mortgage lender will automatically cut its standard variable mortgage rate - currently at 2.5 per cent - by the same amount on 1 May.

Existing tracker customers will also benefit from any rate cut from 1 May. The lender does not have a collar on its trackers so product rates have the potential to go to 0% if base rate continues to fall.

Since base rate began to fall in December 2007, the lender has cut its standard variable rate by the full 5.25 per cent. On a typical repayment mortgage of £150,000, this represents a monthly saving of £460.

Should base rate be cut, the lender will review wholesale funding costs to see if any saving can be made on new fixed and tracker products.