Lloyds TSB mortgage rates to be cut if base rate is reduced

Date:Thursday 4th December 2008
Author: Susanna Kavka

Cheltenham & Gloucester and Lloyds TSB mortgage rates will go down if the Bank of England cuts the base rate, the lender has pledged.

The organisations said they would review fixed and tracker mortgages and that their standard variable rate would be reduced from its current level of five per cent in the event of a base rate cut.

Spokesperson Stephen Noakes stated: "Whatever the size of the cut, if the base rate comes down…we'll pass the full benefit on to our existing customers."

Meanwhile, research by Paragon Mortgages has found that there has been a drop in the number of interest-only mortgage deals.

In the first quarter of this year, 26 per cent of mortgages from a group of more than 200 financial advisers were interest-only.

But Paragon found that, in the third quarter, the figure had fallen to 23 per cent.

In contrast, 49 per cent of mortgages that the polled group had introduced were for fixed-rate mortgages, up from 46 per cent in 2008's first three months.