Tracker mortgages 'coming into their own'
Published On 14 December 2007
Following the recent Bank of England decision to cut interest rates, tracker mortgages could now become more popular as they will almost always offer a better value deal than a fixed-rate product, depending on starting rate.That is according to independent mortgage advisor John Charcol, which also noted that availability of competitive deals was not a problem, despite the fact that many banks and providers are reducing the number of products on offer following the global credit crunch.
Ray Boulger, senior technical manager of John Charcol, said: "We've been recommending tracker mortgages for those people who want a variable mortgage for a long time.
"Because of the services a tracker provides, in that you’re guaranteed to have your rate move in line with the Bank of England rate, as opposed to being at the mercy of your lender, I think that now trackers are really coming into their own."
He warned, however, that there are usually a few lenders who do not move their rate in line with that set by the Bank. According to a new report from the Press Association, only eight of 120 UK mortgage lenders have so far reduced their lowered their rates following the base rate decision.
