With the announcement by the Bank of England that interest rate is to be reduced to 3% a number of mortgage lenders have begun to introduce new tracker mortgages.

Lloyds TSB, which runs the Cheltenham & Gloucester, Abbey and Alliance & Leicester have this week introduced new tracker deals, which according to experts still offer “good value” despite having a margin between the interest rate charged and the bank rate.

The new deals will all come with a 'collar' which means that they will cease to pass on any interest rate savings once the bank rate drops below a certain point. Nationwide currently has a 2.75% lower limit and HBOS have a 3% floor.

Reports have also suggested that the deposit required to get better interest rates will be higher than on previous deals. Aaron Strutt, a mortgage manager, said that the deals were still good value.

"We are expecting the Bank rate to fall further. Lenders will hopefully be introducing more tracker deals, but borrowers should be careful regarding the collars. Lenders are generally offering trackers new deals 2% above the Bank rate. If the Bank rate goes down to 2% or 1%, this is still going to offer fantastic value for money." Said Strutt.