Homeowners will be studying their small print like never before after banks declared yesterday that only certain mortgage customers would benefit from cuts in the interest rate.

The Bank of England's decision to reduce the base rate from 3% to 2%, a historical low not equalled since 1951, will save some borrowers hundreds each month while leaving others out in the cold.

Arrangements for standard variable rate customers vary from bank to bank, but only a few are passing on the reduction in full.

Borrowers with tracker mortgages should see the full rate reduction trickle down whichever bank they are with, but those tied into fixed-rate agreements will be unable to take advantage without paying get-out fees.

Iain Somerside, a financial adviser and partner in the Glasgow-based Mortgage Shop, warned yesterday that banks were profiting from a rate cut that was intended to benefit customers.

He said: "The margin the lenders get would still be the same if they cut rates by 1%, and it's frustrating that by not passing on the rate cut they are increasing their own margins."

Mr Somerside highlighted the problem of lenders with fixed "collar" agreements that prevent lending interest from falling below a pre-set level, usually around 2.75%-3%.

"It does depend on what type of mortgage you have, but a lot of lenders - Nationwide, for example - have a collar of around 2.75%. The new products they have brought out have collars as low as 1%, but the issue is whether existing customers are being trapped by their arrangements," he said.

"We're advising people to keep on a variable rate because there will probably be another reduction in January, and there should be some great fixed-rate deals appearing after that."

Most banks will be passing on the reduction to business customers, and the Scottish Retail Consortium (SRC) welcomed yesterday's reduction, the third in three months.

Richard Dodd, a spokesman for the SRC, said: "This will take time to filter through, but it is certainly the right thing to do.

"Clearly there's no threat from inflation any more. Our own figures showed this week that Scottish shop price inflation slowed to 3.87% in November, so there's no reason the Bank of England shouldn't focus attention now on minimising the depth and length of the recession with a rate cut, as they did yesterday.

"When you add together the impact of VAT reductions, changes to income tax and the reductions in interest rates, there's every hope that customers will start to feel more confident."

For a borrower with a mortgage of £150,000 the 1% reduction, if passed on in full, could have a significant impact on household economy, saving around £85 every month.

A homeowner with a £250,000 debt would be better off by £142 each month - worth more than £1700 over the course of a year.

The reduction in the Bank of England base rate is the third in three months, and means a total fall of three percentage points since September 2008.

But, despite the relative easing of pressure on borrowers, analysts have suggested that more needs to be done to stimulate the ailing economy.

Andrew Smith, an adviser at accountants KPMG, warned that more extreme ideas may have to be imported from across the Atlantic to help Britain weather the storm.

He said: "It is unlikely that low interest rates alone will achieve the desired result, and the UK may well have to follow the United States with unorthodox measures, such as buying up mortgage and commercial debt to free up lending."

Yesterday's announcement comes after HBOS revealed that house prices across the UK dropped by 2.6% during November, the fastest fall since 1992.

Stoking fears that Britain was sliding into a serious recession HM Revenue and Customs (HMRC) yesterday announced the closure of more than 90 offices across the UK, prompting union leaders to warn of a potential 3400 job losses. Around 400 of those affected could be based in Scotland, where 20 premises are due to close.

The Public and Commercial Service Union, the largest civil service workers body, expressed "concern" that HMRC would be unable to maintain service once the cuts are implemented in 2011.

However, HMRC management dismissed the claims as "scaremongering" and maintained that no job cuts had been announced.

A spokesman for Revenues and Customs in Scotland, said: "I'm a union member myself, and I know where they're coming from, but there are no job cuts.

"This is a long-term thing, and nothing to do with the economic climate. We're just closing offices where they're not needed, and we will be minimising disruption to our staff."

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