The rate comes down from 10.7 per cent to 9.6 per cent rather than 9.99 per cent.
This brings down the monthly payments on a pounds 50,000 endowment mortgage from pounds 378 to pounds 339 - a saving of pounds 39.
Glenn Elliot, chief executive of the society, which is ranked at 22 in the league of building societies and has 39,000 borrowers, said: 'We are confidently anticipating that the Chancellor will cut the base rate. The money markets have been discounting a cut of at least 0.5 per cent for some time. It's true we have gambled on a rate cut, but it's a pretty good gamble.'
He added that the move to lower mortgage rates was a contribution to stimulating the housing market.
Savers' rates are not coming down yet.
No other lenders have yet followed the Abbey National. Most would rather wait until a base rate cut materialises. They are all watching each other to see if there is going to be a general move ahead of a base rate cut.Reuse content