No interest on your Mortgage deal? Lloyds TSB could lead the way

If you hold a Tracker Mortgage with Cheltenham & Gloucester who are owned by Lloyds TSB at 1.01 percent below the Bank of England base rate, then you could be seeing a zero interest rate on your mortgage repayments if the Bank of England Monetary Policy Committee cuts the base interest rate to 1 percent which is being predicted by economists.

The Particular deal was available from C&G in July and August last year and was offered as a 2-year product tracking below the base rate of 1.01 percent.

Holders of this particular C&G deal will benefit from last Thursdays interest cut, their new interest rate on the deal will be 1.99 percent, which according to market experts this is the lowest rate they can remember. This brings the repayments down considerably. If you held a £100,000 loan on this particular product you would be paying £423 a month on a repayment mortgage and £165.83 on an interest only on the same loan amount.

The Co-Operative Bank also offered in August 2007 a two-year tracker deal at 0.61 percent below BOE base rate, and Nationwide had a two-year Tracker that tracked below the base rate by 0.27 percent, however Nationwide will not reduce the rate once if it falls below 3 percent.

The downside to for the homeowners on the mentioned products is that they were only for two years and would be coming to an end the second half of 2009 and then they will have stay on their current lenders SVR or re-mortgage to a different lender. Both would be considerably more expensive.

Source: ukpress.google