Borrowers who have tracker mortgages would have met the base rate cut earlier this month with relief, but this was quickly to be followed by disappointment because lenders have not reflected the lower base rate in their customers’ mortgage repayments in time for Christmas.

Only 37 per cent of lenders have announced a rate cut in light of the lower base rate, but they said that the new rates will not take effect until the very end of this year or the beginning of the next. Furthermore, just 28 per cent of lenders said that they will be passing on the full benefit of the 0.25 per cent drop in the base rate.

Louise Cuming, head of mortgages at moneysupermarket.com, said: “Lenders need to address their mandate of treating customers fairly. Four out of every five mortgage lenders have given themselves an early festive treat by not passing on the reduction to their Standard Variable Rates.

“In the current economic climate I would have liked to have seen providers showing a little more compassion towards borrowers who have spread themselves thin over the Christmas period. Time and time again we see this delay in passing on reductions. Perhaps providers’ New Year’s resolutions could be to pass on rate changes automatically or backdate them.”

She continued to say that it is disappointing that in many cases rate cuts of only 0.14 to 0.20 are being passed on to borrowers. “The Bank of England decision to cut rates by 0.25 per cent was to try and boost the economy,” she said, “but a cut of 0.13 per cent won’t do that.”

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