Mortgage Industry News

← Back

Tracker deals offer best cheap mortgage

Date: Thu, 18 May 2006

Tracker-rate mortgages are starting to represent better value when compared to fixed-rate mortgages, according to new research.

Figures from online comparison service Moneyfacts show that over the last four weeks fixed rate loans have become more expensive, whilst trackers have become more affordable.

Fixed-rate deals have dominated the UK cheap mortgage rate for the past 18 months after the Bank of England was predicted to cut its base rate, with some lenders offering cheap mortgages with interest rates of just 4.24 per cent.

However, it is looking increasingly likely that the Bank of England is set to increase the interest rate as house price inflation continues, especially as swap rates rise.

"With continued rumblings in the market of a base rate increase later this year, consumers may be choosing now to secure a fixed rate deal, but with swap rates rising they may need to be quick before the very low rates disappear," said Moneyfacts analyst Lisa Taylor.

Moneyfacts is forecasting that the cheapest fixed-rate deal available to homebuyers could be around five per cent, compared to tracker products which could offer a cheap mortgage rate of less than 4.75 per cent until the end of the year.


© 1998-2005 DeHavilland Information Services plc. All rights reserved.

Endsleigh Insurance Services Limited is authorised and regulated by the Financial Services Authority. This can be checked on the FSA Register by visiting its web site at www.fsa.gov.uk/register.
Endsleigh Insurance Services Limited. Company No: 856706 registered in England at Shurdington Road, Cheltenham Spa, Gloucestershire GL51 4UE.