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C&G borrowers pay 1p a month

Some 1,400 Cheltenham & Gloucester borrowers are paying just 1p a month on their mortgages as the Bank of England base rate continues to plummet towards zero.

Borrowers that took out C&G’s two-year tracker deal at 1.01% below base rate on an interest-only basis should be paying nothing. But as the lender’s computers are not geared up to deal with the zero rate, customers are being charged a nominal rate of 0.001%.

A spokeswoman for the lender warns that borrowers should not get too comfortable.

She says: “We are advising customers to overpay if they can, to protect themselves against falling house prices and negative equity.”

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