Gillian McLachlan and Rosie Davies

ONLY six of the big lenders have now pledged to pass on the rate cuts to their mortgage customers despite interest rates hitting an all-time low.

HSBC, Lloyds TSB Scotland, Nationwide and Skipton promised to pass on the full 0.5% reduction to their Standard Variable Rate (SVR) customers. HBOS and RBS have reduced their SVR by 0.25% to "balance the interests of savers and borrowers".

Lloyds TSB Scotland, Nationwide and Skipton had little choice but to pass on the reduction due to their pledge to stay within 2% of the Bank of England base rate. Around 10% of mortgage holders are currently on SVR mortgages.

The majority of lenders are not expected to pass on the full 0.5% cut to their variable-rate borrowers with many, including Barclays, Northern Rock and Abbey, stating that their SVR rates are currently "under review". Yorkshire Building Society, which has yet to announce a decision, has said it is unlikely to pass on the full 0.5% reduction, in order to protect savers.

However, several lenders have announced that they will pass on the full reduction to borrowers currently on tracker deals, who account for around 40% of customers.

HBOS, Abbey, RBS, Skipton, Barclays, Bristol and West and Britannia BS have all guaranteed that payments on tracker rates will fall in line with the base rate cut. However, around 300,00 tracker customers will miss out partly or completely, due to lenders imposing collar clauses into their contracts that mean they can refuse to lower rates beyond a certain point.

The majority of Britain's mortgage-holders, around 50%, are on fixed-rate mortgages and will not see any benefit at all from the base rate cut.

However, Tim Franklin, managing director of member business for Britannia, which yesterday announced it was slashing its fixed-rate mortgages, believes that choosing a fixed-rate mortgage may be the best option.

He said: "Although interest rates are low right now, with so much uncertainty about what will happen in the future there is no guarantee they will stay low in the long term."

He added: "With this in mind, opting for a long-term fixed-rate now means borrowers will have the reassurance that their monthly payments will be protected at a more affordable level, regardless of what happens to interest rates for up to ten years."

Lynn Chisholm, director of Finesco Financial Services, yesterday called for further action to be taken to secure the housing market.

She said: "Interest rate cuts only help those who have tracker mortgages. The problem is the lenders are now looking for a larger deposit, usually around 10 to 20%, so rate cuts don't help first-time buyers at all. What will actually help the mortgage industry is encouraging banks to lend.

"The cut hasn't helped mortgage brokers at all, it has not helped solicitors, and it certainly hasn't helped the housing market. The only thing it has done is to secure people who already have a tracker mortgage, or to help those staying with the SVR."