Mortgage lenders match rate cut

Most will wait until early March to cut standard variable rates in line with the 0.25% base rate reduction.

Halifax, Nationwide, Abbey, Royal Bank of Scotland/NatWest and Lloyds TSB all said they would pass on the interest rate cut in full.

A £100,000 repayment mortgage would be £15 a month cheaper, said the Council of Mortgage Lenders (CML).

But the CML warned borrowers not to expect an automatic cut in standard variable and discount rates across the market.

"Lenders' rate-setting policies are more complex than simply the level of the base rate," said Michael Coogan, director-general of the CML.

"They are determined by a range of factors including the cost of retail funding and the cost and availability of wholesale funding."

Cuts in March

Halifax, Nationwide, NatWest, Abbey and Lloyds TSB will all pass on the cuts to customers on 1 March. HSBC said it would make the cut on 7 March.

But First Direct says it is cutting its rate from 6.5% to 6.25% with immediate effect for all its variable rate mortgage customers and new customers.

The cuts are in sharp contrast to the last rate fall in December, after which a fifth of lenders - mainly small operations - failed to pass on the 0.25% cut in full.

More than a dozen lenders have increased their tracker mortgage rates for new borrowers since the beginning of the year, despite base rates remaining unchanged until now.

Interest rates will also be cut for savers - although Kaupthing Edge, an Icelandic bank new to the UK retail market, said it was retaining its 6.5% AER savings rate.

Peter Bolton King, chief executive at the National Association of Estate Agents, said: "There is a serious lack of confidence in the market at the moment and I sincerely hope that the latest interest rate cut will help."