Borrowers taking out tracker mortgages during the global credit crisis are paying the highest rates in more than seven years, official figures showed yesterday.

Banks and building societies have quietly increased the costs for new borrowers to profit from sharp reductions in the Bank of England base rate.

The average tracker mortgage in October was 6.84% — compared with a base rate of 4.5%.

Last week, the Bank of England cut the base rate by a further 1.5 percentage points to 3%. The actions of mortgage lenders will anger ministers who have repeatedly called on banks to allow home owners to benefit from interest rate cuts intended to alleviate the impact of the coming recession.

Daily Telegraph

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