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The Prime Minister, Gordon Brown, and the Chancellor, Alistair Darling, recently announced some welcoming news to the nation, stating that the base rate was going to be cut a day ahead of the Monetary Policy Committee meeting. The base rate was cut by 0.5%, which was the biggest cut for some time, and many consumers hoped that this meant that their borrowing costs would fall and leave them with more disposable income each month

However, for some consumers the good news did not last long, as some lenders said that they would only be passing on part of the rate cut and others said that they would not pass on any of the rate cut. Therefore, some consumers will not be able to benefit from the base rate cut if they go through a lender that has decided not to pass on the interest rate cut. However, some lenders have already promised to pass on the rate cut, so some consumers will be able to save money

After the 0.5% base rate cut was announced by the government some mortgage lenders did announce that over the next few weeks they would be passing on the full rate cut to borrowers, which means that some borrowers will enjoy the benefits of the base rate cut. However, there were also lenders that decided to pass on only part of the base rate cut, and there were even some that said that they would not be passing on the rate cut at all

When it comes to loans whether or not you get a reduced interest rate will depend on a number of factors, such as whether the lender is passing on the rate cut, whether you are a new customer applying for a loan, or whether you already have a loan that is variable rate. Those with fixed rate loans or mortgages will obviously not see any change in their interest rates because they are fixed

As a new borrower or someone that is looking to switch their mortgage or loan you need to make sure that you compare different finance packages from a range of lenders in order to increase your chances of getting the most competitive rate of interest, especially given that the interest rate has fallen. Use the Internet to check what rates are now being offered by different mortgage, loan, and credit card lenders, and you could also save yourself time and money

Many people who have been paying over the odds on their mortgage may decide that now is a good time to switch to another lender and find a mortgage with a more competitive interest rate. However, whilst this may prove effective you should remember that there may be arrangement and other fees involved, and this could make it less worthwhile to change. Check out what fees are involved and how much you will be charged before you switch your mortgage or loan to another lender, even if the headline rate appears tempting

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