To track or not to track?
Deciding whether to get a tracker mortgage or a fixed-rate deal is one of the biggest decisions facing homeowners and first-time buyers at present.
Fixed deals are at their cheapest since 2007, after Britain 's biggest lenders cut rates across the board in recent weeks.
However, weak economic growth data of late as well as falling inflation have left many experts predicting no change in the base rate of interest until at least next year.
Figures from the Council of Mortgage Lenders showed that two in three borrowers are now opting for a fixed-rate mortgage, compared with less than a quarter choosing tracker deals.
This is a significant change in attitude from 12 months ago, when less than 50 per cent applied for a fixed rate.
Melanie Bien, a director of Private Finance, the mortgage broker, said: "Even though the likelihood of an interest rate rise has been pushed back into next year, there are many borrowers who prefer the certainty, particularly when it comes at rock-bottom prices.
"Those who have enough equity in their home and can qualify for a five-year fixed rate at less than four per cent may be wise to take it, as it is unlikely to get much better than this."
James Cotton, of London & Country Mortgages, said fixed-rate deals may get even better in the coming months, but borrowers may be wise to take the plunge now.
"Will rates get lower than they are now? Maybe, but the best deals around now offer great value and a lot of borrowers don't want to risk missing the boat," he said.
Use the Myfinances.co.uk comparison tools to find the best deal on a new mortgage
- Tags:
- fixed rate mortgage ,
- mortgage ,
- news ,
- tracker mortgage
Comments
Newsletter sign up