Rate cut joy for borrowers

The base rate of interest has been cut by 0.25 percentage points, taking it down to 5.25 per cent.

Borrowers have not benefited from a rate this low since January 2007 and the move will be welcomed by the majority of mortgage holders.

The Bank of England's Monetary Policy Committee (MPC) was widely expected to announce a cut in an attempt to stimulate economic growth.

Recent rate cuts have led to disappointment, with many lenders failing to pass the full reduction onto customers.

However, things are already looking more positive for borrowers this time round with a number of major lenders announcing a reduction in rates almost immediately.

Nationwide, Lloyds TSB, Cheltenham & Gloucester and Royal Bank of Scotland have all revealed that their customers will benefit from the full reduction.

Commenting on the reduction, Michael Coogan from the Council of Mortgage Lenders said: "This is good news for the quarter of UK borrowers on tracker rates who will see an imminent reduction in rates."

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