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Many consumers may be looking forward to seeing their borrowing costs fall as a result of the recent base rate cut, with senior officials from the government having announced earlier this month that they were shaving 0.5% off the base rate in a move to aid the flagging economy, increase confidence amongst consumers, and ease financial pressures amongst consumers. This was news that was greeted with joy by some industry officials and most consumers.

The news of the rate cut was welcomed by industries and consumers around the country, and many were hopeful that they would be able to save money on their outgoings as a result of the base date cut. However, whilst it is natural to assume that a cut in the base rate means a cut in variable borrowing costs this is not always the case, and not all borrowers will benefit from the base rate cut

After the announcement of the rate cut around a quarter of mortgage lenders said that they would be passing on the rate cut to borrowers, which means that both existing and new borrowers with these lenders may be able to save money on their borrowing. However, the remainder have not yet passed on the rate cut or have already confirmed that they do not plan to do so, which leaves customers of these lenders out in the cold when it comes to saving money

Whereas in some cases, where the lender does pass on the rate cut, consumers will benefit and save money on their borrowing costs due to the rate cut, there are other new borrowers and existing borrowers with less scrupulous lenders who will not benefit because the lender decides that the rate cut is not going to be applied or takes time in passing the rate cut on to borrowers. Many lenders of mortgages have been accused of pocketing the money from the rate cut by refusing to or delaying passing it on to consumers.

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

If you already have a mortgage and want to see if you can get a better rate of interest following the base rate cut in order to save yourself money you can compare different providers with a view to switching your mortgage to a better deal. However, do remember that there can be high arrangement fees and charges applied by the new lender, and this should be taken into account.