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Average tracker mortgage deals are stuck at 2007 levels, despite the Bank of England's interest rate cut this month.

In October 2007, the average rate on a tracker mortgage stood at 6.23 per cent; today it is at 6.27 per cent.

This slight rise comes despite the Bank of England cutting its base rate by 1.25 per cent over the last year.

Banks and building societies are holding their rates high for a number of reasons – not least the continuing hangover of the credit crunch.

Government moves to increase the capital bases of banks also mean they are no longer cutting their rates to the knuckle in order to be competitive and are looking after their profit margins.

Michelle Slade, analyst at Moneyfacts.co.uk, said: "Despite the best efforts of the Bank of England to bring borrowing costs down, lenders just aren't passing the cuts on to consumers, either on the mortgage front or on other aspects of finance including business.

"Since the 0.50 per cent cut at the beginning of the month, numerous lenders have announced cuts in their tracker rates. However, with all the increases during the last year, borrowers are in no better position than they were a year ago."

She added: “Lenders are factoring in a much bigger margin for risk than ever before and as a result mortgage rates remain high. The last time base rate was 4.50 per cent, borrowers could have obtained a rate of 4.25 per cent on a two-year tracker."

Today the best tracker mortgage rate on offer is 5.99 per cent.

Next week the Bank of England's monetary policy committee meets to set interest rates – with the widespread belief the cost of borrowing will fall by another 0.5 per cent.

Some analysts even warn of a further 0.5 per cent cut in December – and Charles Goodhart, a former member of MPC, even stated yesterday the base rate could go down to zero.

However, if rates go down further homeowners with tracker mortgages will not see their interest rates falling likewise – as many lenders have collars stopping tracker rates dropping too low.

"As the rates that deals are collared at are quite low, they haven’t been implemented in quite some time," Ms Slade said.

"However, if base rate continues to be cut, we could see more lenders introducing them."

Nationwide now has all trackers collared at 2.75 per cent, while Chesham Building Society and Skipton Building Society stop trackers dropping at 3.50 per cent and three per cent.