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New tracker mortgage trend

Date: Thu, 28 Apr 2005

More mortgage companies are offering potential housebuyers the opportunity to apply for a tracker mortgage.

For instance, leading broker Charcol is offering clients a new five year tracker based on lower Euro rates. The Euro Mortgage will track short-term Euro Libor rates meaning it is 0.5 per cent better than the next best equivalent tracker product based on UK rates. A sign that mortgage companies are examining ways of introducing new tracker products to the market.

Ray Boulger, senior technical manager at Charcol, said: "The key to evaluating this product is the likely differential between short-term Euro and UK interest rates over the next five years.

"The cheapest conventional UK tracker mortgage over five years offers a rate of Bank of England Base Rate, 4.75 per cent."

Tracker rate mortgage are increasing in popularity due to the continued confusion over interest rates, leaving many people reluctant to commit to a fixed rate loan.

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