Mortgage rates cut with base rate reduction

Date:Friday 6th March 2009
Author: Max Freedman

Mortgage rates will be reduced after the Bank of England cut the base rate to 0.5 per cent.

Lloyds TSB and Cheltenham & Gloucester announced that its standard variable rate (SVR) will receive the full 0.5 per cent reduction.

This will bring it down to 2.5 per cent.

Stephen Noakes, commercial director for Cheltenham & Gloucester, said that the market has bottomed out for fixed rates, "give or take a little movement", and advised people to try to get into a fixed-rate deal.

"Even those who may currently be sat on a record low SVR should weigh up the immediate bonus it offers versus the longer term savings a five or ten year fix will secure," he said.

Abbey mortgages are also having rate cuts, with the SVR reduced by 0.45 per cent and existing variable rate deals down by 0.5 per cent.

As with Lloyds and Cheltenham & Gloucester, the reductions will be made from the beginning of April.