Lender 'would have passed on interest rate cuts'

Date:Thursday 9th April 2009
Author: Susanna Kavka

Lloyds TSB and Cheltenham & Gloucester - which is part of the bank - pledged to pass on any rate cut made by the Bank of England's monetary policy committee this month.

However, at noon today (April 9th), the Bank of England's monetary policy committee revealed that it is keeping the base rate at 0.5 per cent.

Prior to the decision, Lloyds TBS pointed out that it does not have any collar on its tracker mortgages so product rates have the potential to fall to zero per cent if rates continued to decrease.

It also said its existing tracker customers would benefit from any rate cut from May 1st.

In addition, its standard variable mortgage rate, which stands at 2.5 per cent, would have been reduced if the base rate had been lowered.

Lloyds TSB pointed out that it has cut its standard variable rate by 5.25 per cent since the base rate began to decline in December 2007.

This represents a monthly saving of £460 on a typical repayment mortgage of £150,000, it added.