6
Aug
Tracker mortgages 'grew more popular' in July
An increasing number of people are attracted to the advantages
offered by tracker mortgages in the current economic climate.
According to loan adviser Mortgageforce, the level of interest in
tracker mortgages - which use the Bank of England's base rate of
interest as their repayment benchmark - increased last month.
In contrast, fixed-rate mortgages - which offer stability as they
are not linked to changes in the base rate - declined in
popularity, with 63 per cent of borrowers choosing these products
in July, compared to 75 per cent in June.
Katie Tucker, technical manager at Mortgageforce, said that the
trend shows that people are "fickle in their favour" and will be
attracted by low repayment rates.
"Lenders released some storming tracker and discount rates in
response to the rush on fixed rates in June, because bank and
building societies' own loan sheets have to have a balance between
fixed-rate customers and variable-rate customers," she
explained.
Those borrowers who are currently on tracker mortgages were given
good news today when the Bank announced it is to keep the base rate
at 0.5 per cent.
Since it was cut in March, the interest rate has been at the lowest
in the institution's history.
