Tracker mortgages good option for many

Posted: 27 Feb 2008 10:55:20 GMT

Tracker-rate mortgages are proving to be popular among borrowers at present, with many people expecting the base rate of interest to continue falling.

Tracker-rate mortgages are proving to be popular among borrowers at present, with many people expecting the base rate of interest to continue falling.

Moneysupermarket has pointed out that tracker deals can offer good value to borrowers but there is a certain amount of risk.

The firm said that people who are not too concerned about affordability should consider taking out a tracker-rate mortgage in order to benefit from further rate cuts.

"At the moment, the percentage of customers that are on trackers… although it's only 24 per cent, that's the highest it's been since back in 2005," commented Louise Cuming, head of mortgages at Moneysupermarket.

"Which shows that, for those who aren't too worried about affordability, the trends appears to be [to expect] rates to go down.

"At the moment, if [affordability] isn't an issue with you, I would say a tracker rate is probably your best bet because I think the trend for rates is going to be down in the next 12 months," she added.

The base rate of interest currently stands at 5.25 per cent following a 0.25 percentage point reduction in February.

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