Abbey to pass on interest-rate cut

Most of last week's 1.5% cut in the interest rate is to be passed on by Abbey after it relaunches its variable tracker mortgages.

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People borrowing 60% will pay 4.89% with a £499 arrangement fee for a two-year tracker, which will continue to fall in line with the Bank of England base rate unless that falls below 0.0001%.

Those with a loan-to-value ratio of 75% will pay 4.99% with a £995 arrangement fee. The new deals will be available from Wednesday this week.

Abbey is also reducing its two-year fixed-rate mortgages by up to 1%, giving a new rate of 4.49% for those with a 40% deposit who pays a £995 arrangement fee, rising to 4.79% for a 25% deposit.

Cheltenham & Gloucester, which is part of Lloyds TSB, is also reducing its fixed-rate mortgages by up to 0.3% from Tuesday for people borrowing 60% or 75% of their home's value.

The move leaves a two-year fixed-rate deal for someone with a 40% deposit who pays a £1,995 arrangement fee at 4.89%.

Copyright © Press Association 2008

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