Tracker mortgages attractive to borrowers

Posted: 09 Apr 2008 11:18:35 GMT

New figures show that mortgage borrowers are increasingly attracted to tracker-rate mortgages.

New figures show that mortgage borrowers are increasingly attracted to tracker-rate mortgages.

It comes at a time when the majority of analysts believe that the base rate of interest is set to fall.

According to the Council of Mortgage Lenders (CML), 35 per cent of borrowers in February took out tracker-rate deals.

This compares to 33 per cent in January and just 14 per cent in February 2007.

Fixed-rate products fell in popularity at the same time, accounting for 52 per cent of the market in February, their lowest level for over two years.

Michael Coogan, director general of the CML, said that the promise of falling interest rates is attracting borrowers to tracker mortgages.

"The trend away from fixed-rate products continues as expectations of further Bank base rate reductions, probably starting this week, have increased," he commented.

The Royal Bank of Scotland recently forecast that the Bank of England would cut the base rate to 4.5 per cent by the end of the year.

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