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Mortgage lenders drop base rate trackers after base rate cut

In a move which is sure to anger the government it has been revealed that the Cheltenham & Gloucester has withdrawn many of its more popular mortgage deals in the wake of the Bank of England's half point reduction in interest rates. The move relates to an array of base rate tracker mortgages and seems to fly in the face of assurance given by the government just yesterday.

It has also been revealed that the likes of Nationwide and Abbey are on the verge of taking similar action which will crush the hopes of many first time buyers who had become a little more upbeat after yesterdays events. So why have they withdrawn these packages?

While there is no one main reason why these packages have been withdrawn it seems as though there is still concern about the long term rate of lending in the money markets. Many banks seem happy to withdraw these packages for now and then see how the money markets settle down and whether the enthusiasm of yesterday is followed through.

If the banks in question decide to take up the governments offer of extra financing it has been indicated that they will be expected to pass on savings to mortgage holders and first time buyers, but will they be good to their word?

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