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Base rate cuts will do nothing to improve the morose mortgage market conditions that are behind declining property prices. This was the bleak message coming from brokers and estate agents yesterday, who cautioned that homeowners may never again be able to assume that falls in the Bank of England base rate automatically equal cheaper deals.

“The rate cut is a bit of a red herring. It is not suddenly going to answer our prayers” says Jonathan Cornell, of Hamptons International, a mortgage broker. “If it had happened a year ago, I would have sprayed champagne around the room. Now, I am just guardedly optimistic.”

In these more conservative times, mortgage lenders care more about the size of a deposit or equity stake than interest rates when deciding what they are prepared to offer, if anything at all. This revival of old-school, sensible lending values, prompted by the credit crunch, is here to stay.

Yolande Barnes, of Savills, says: “There has been a return to the days of the mutual lending style. In the future, there will be a closer relationship between the size of your deposit and your mortgage rate than between base rates and mortgage rates.”

For first-time buyers, this will mean writing-off home ownership until they have a big deposit. On a £150,000 property, a buyer would need a £15,000 deposit before he or she could approach a lender. But for the half a million borrowers who are due to remortgage in the next six months, the rate cut could give them a better chance of securing a bargain.

Ray Boulger, of John Charcol, another broker, says: “The recent trend has been for lenders to increase fixed rates. This will now come to an end. We could see fixed rates coming down again as early as next week.”

However, there is a danger that lenders will not pass on the cut. Whether or not they do will depend on how money markets respond to the Government's £500 billion bailout. If they respond positively, rates could fall, if not, they will remain high.

Barnes says: “Much will depend on whether the measures to introduce capital into the lending markets allow margins over base rates to fall.”

Brokers are telling customers that, given predictions of more rate cuts, tracker deals, which are linked to the base rate, are now the smart option. “It's trackers all the way at the moment,” Cornell says. These deals have been becoming more popular, but as a result lenders have been raising rates and pulling deals to try to curb demand. However, with economists factoring in a further 1 per cent base rate decrease before Christmas, there are still savings to be made.

If you need to remortgage and have an equity stake worth at least 40 per cent of your property's value, you could snap up a 5.03 per cent two-year tracker from Nationwide, which despite the £1,999 fee is still the cheapest in its category for loans of less than £500,000 - the maximum that Nationwide will lend.

Buyers who want the security of fixed repayments will be tempted by First Direct's 5.19 per cent two-year fix. Can't decide between a fix or a tracker? Nationwide is offering the best of both worlds, a two-year 5.08 per cent “drop-lock” - a tracker that allows you to “lock-in” to a fixed rate whenever you choose, for a £1,999 fee.

For borrowers with savings to offset, a 4.99 per cent offset tracker from First Direct is the cheapest. The bank will lend up to 80 per cent of your property's value for a £999 fee. It will also allow under and over-payments, a useful feature for erratic incomes.

Buy-to-let borrowers will not be offered better than a 5.49 per cent two-year tracker from Lloyds TSB, with a maximum loan-to-value of 60 per cent. If they need a bigger loan, Bristol & West's 7.29 per cent three-year fixed rate, with a 1.5 per cent fee, is available up to 85 per cent.

For cash-poor borrowers with only a 10 per cent deposit or equity stake, HSBC has a 5.69 per cent discounted deal with a £249 fee - the best on the market for loans up to 90 per cent.

But stay alert - in such a volatile market, such deals can change very quickly. Boulger advises: “Continue to go for trackers, preferably with a drop-lock, and keep your eyes and ears open.”

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