Legal & General: base rate cut

Ben Thompson, Director of Mortgages at Legal & General said: "Despite today's cut, the impact on borrowers will be minimal. Current credit conditions have resulted in more tiered pricing for mortgages which means that anyone with less than a 25% deposit is facing a higher rate than they would have done over the past six months.

Whilst lenders actively make it more difficult and more expensive to take out a mortgage, the ripple effect on fixed rates resulting from a change in the base rate is limited. In fact, fixed rates are more in line with LIBOR, the inter-bank lending rate, which remains three quarters of a percent above base rate. Until credit for the lenders becomes more readily available, those looking to buy a house or remortgage will continue to feel the pain."