This week’s base rate cut means some borrowers will see their mortgage rates drop below 3 per cent – a level that is so low they could be better off saving spare cash rather than using it to pay off their loan.

These borrowers will have signed up to tracker deals last year charging below the base rate. Meanwhile, even after the Bank of England’s rate cut takes effect, competition is likely to keep the best savings rates at above 5 per cent. This difference means low-rate borrowers could earn an additional profit over the cost of their loan, even if they are subject to 40 per cent tax on the savings interest.