Lloyds TSB and Cheltenham & Gloucester will pass on the latest base rate cut to existing variable and tracker customers.

The mortgage lender will automatically cut its standard variable mortgage rate – currently at 3.0 per cent – by the same amount of the base rate cut, 0.5% on 1 April.

Existing tracker customers will also benefit from any rate cut from 1 April. The lender does not have a collar on its trackers so product rates have the potential to go to 0% if base rate continues to fall.

Since base rate began to fall in December 2007, the lender has cut its standard variable rate by the full 4.75 per cent. On a typical repayment mortgage of £150,000, this represents a monthly saving of over £420. If rates are cut by 0.5 per cent again on Thursday, tracker and variable rate customers are set to make a further monthly saving of £38.

Stephen Noakes, C&G commercial director, said: “Economists have differing views on what action the Bank of England will take tomorrow and a rate cut is not a dead cert. If base rate does fall, we will pass it on to tracker and variable customers, who are already hundreds of pounds a month better off.”

Should base rate be cut, the lender will review wholesale funding costs to see if any saving can be made on new fixed and tracker products.