Homeowners are paying an average of £1,800 a year extra for their mortgages as banks fail to pass on cuts in borrowing rates. All the big lenders, including those saved from ruin by the taxpayer, are keeping their loan rates up, despite the bank base rate plunging to a historic low of 0.5 per cent. The banks have defended their high rates by claiming they have to refund the cost of borrowing money. Today they are adding an extra 2.61 per cent to the average mortgage on top of their borrowing costs. That means the average borrower with a typical mortgage is paying an extra £1,788 a year. The difference between the cost to the banks of borrowing money and the amount they charge for loans is the largest since the 1980s.