<h1>Coming next ...the 8p-a-month mortgage
</h1>
<p> By <a href="http://www.dailymail.co.uk/home/search.html?s=y&authornamef=Mail+On+Sunday+Reporter" class="author" rel="nofollow">Mail On Sunday Reporter</a>
<br /> Last updated at 9:29 AM on 01st February 2009
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<img src="http://i.dailymail.co.uk/i/pix/2009/01/31/article-1133145-01543B0D00000578-368_233x423.jpg" alt="mortgage" class="blkBorder" height="423" width="233" />
<p class="imageCaption">Thousands of people are set to pay as little as 8 pence a month for their mortgages
</p>
</div>
<p>Thousands of people are set to pay as little as eight pence a month for their mortgages if the Bank of England cuts interest rates to a record low of one per cent next week.
</p>
<p>They include those who took out interest-only loans with the Cheltenham & Gloucester in 2007 at 1.01 per cent below the base rate – in theory meaning they should be charging the bank for their mortgage.
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</p>
<p>C&G has said its computers cannot deal with zero or negative rates and 0.001 per cent will be charged ‘until the computer systems can be adjusted’.
</p>
<p>On a £100,000 interest-only mortgage, this equates to eight pence a month. But C&G has promised to refund these few pence once its system is fixed.
</p>
<p>Hundreds of thousands of borrowers, including those with the Halifax – the biggest mortgage lender – will also see payments drop to a few pounds, pence, or even nothing. But some lenders have ‘collars’ to limit how far rates fall.
</p>
<p>Lenders insist that they will never be in the position of paying borrowers interest, even if rates become negative.
</p>
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<p>C&G said: ‘Our terms and conditions make it clear that interest is only paid by the borrower and not the lender.’
</p>
<p>But mortgage experts claim that borrowers could be legally entitled to cash.
</p>
<p>There is a growing gulf between borrowers on a fixed rate and those whose rates follow the base rate.
<br />
</p>
<p>Fixed rates and rates for new mortgages have remained high.
<br />
</p>
<p>Borrowers paying six per cent on an interest-only mortgage of £150,000 face monthly bills of £750.
</p>
</h1>
<p> By <a href="http://www.dailymail.co.uk/home/search.html?s=y&authornamef=Mail+On+Sunday+Reporter" class="author" rel="nofollow">Mail On Sunday Reporter</a>
<br /> Last updated at 9:29 AM on 01st February 2009
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<img src="http://i.dailymail.co.uk/i/pix/2009/01/31/article-1133145-01543B0D00000578-368_233x423.jpg" alt="mortgage" class="blkBorder" height="423" width="233" />
<p class="imageCaption">Thousands of people are set to pay as little as 8 pence a month for their mortgages
</p>
</div>
<p>Thousands of people are set to pay as little as eight pence a month for their mortgages if the Bank of England cuts interest rates to a record low of one per cent next week.
</p>
<p>They include those who took out interest-only loans with the Cheltenham & Gloucester in 2007 at 1.01 per cent below the base rate – in theory meaning they should be charging the bank for their mortgage.
<br />
</p>
<p>C&G has said its computers cannot deal with zero or negative rates and 0.001 per cent will be charged ‘until the computer systems can be adjusted’.
</p>
<p>On a £100,000 interest-only mortgage, this equates to eight pence a month. But C&G has promised to refund these few pence once its system is fixed.
</p>
<p>Hundreds of thousands of borrowers, including those with the Halifax – the biggest mortgage lender – will also see payments drop to a few pounds, pence, or even nothing. But some lenders have ‘collars’ to limit how far rates fall.
</p>
<p>Lenders insist that they will never be in the position of paying borrowers interest, even if rates become negative.
</p>
<div class="clear">
</div>
<p>C&G said: ‘Our terms and conditions make it clear that interest is only paid by the borrower and not the lender.’
</p>
<p>But mortgage experts claim that borrowers could be legally entitled to cash.
</p>
<p>There is a growing gulf between borrowers on a fixed rate and those whose rates follow the base rate.
<br />
</p>
<p>Fixed rates and rates for new mortgages have remained high.
<br />
</p>
<p>Borrowers paying six per cent on an interest-only mortgage of £150,000 face monthly bills of £750.
</p>
