The rate cut brings mixed blessings for homeowners. Those who already have a tracker deal or a discounted variable homeloan will see their repayments fall from next month. Several of the biggest lenders have already signalled their intention to cut their standard variable rate (SVR) - the rate to which discounted variable rate deals are linked.

But those coming to the end of an existing deal and looking for a new mortgage this year are likely to have to pay hundreds of pounds extra a month after lenders increased their rates sharply in recent months. Those who have little equity in their homes will have to pay even more punitive rates.

Halifax, the UK's biggest lender will cut its SVR by a quarter point to 7 per cent from next month.

Nationwide will cut its SVR by a quarter point to 6.49 per cent, but it will tomorrow increase the rates on its new fixed-rate mortgages by up to 0.32 percentage points. A five-year fix will now cost 6.15 per cent. Two weeks ago, the rate was closer to 5.6 per cent. It also recently increased the rate on some tracker deals by up to 0.52 percentage points.

Lloyds TSB is cutting its SVR to 7 per cent, down from 7.25 per cent.

Woolwich, the mortgage arm of Barclays, is also passing on the quarter point rate cut to customers. The new SVR will be 7.14 per cent from next month.