Libor drops back below 6 per cent

The move in LIBOR rates make the case for a January rate cut much stronger after a unanimous MPC vote in December, coupled with low two-year swap rates at 5.24 per cent.

If the Bank Base Rate does drops back January, then some good value mortgage deals could well see themselves finding their way back into the market.

Katie Tucker, John Charcol's technical manager, revealed: "New product ranges are expected to surface this week as SVR changes announced after the Bank Rate cut last month, were dated mainly for 1January 2008.

"This means many lenders are now operating on variable rates reduced by 0.25 per cent, another long-deserved respite for borrowers with discount rate mortgages. Only a few of the smaller banks and building societies seem to have not passed on the full reduction.

"Interestingly, Lloyds TSB has also adopted the strategy of increasing its tracker rates by 0.1 per cent or 0.2 per cent, despite new, lower funding costs. This means that they are effectively splitting the difference with the borrower, of the value of December's base rate drop, by starting their rate that little bit higher."