A tracker deal may save homeowners money

Homeowners looking for cheap mortgages have been advised that capped tracker deals may provide the answer.

Mortgage provider first direct claimed that due to the current base rate sitting at an all time low of 0.5 per cent, consumers are better off taking advantage of that rather than locking into a fixed rate product.

It explained that its three year capped tracker mortgage deal has a rate of 2.58 per cent plus the base rate, meaning that the Bank of England would have to increase it to 1.75 per cent before the average three year fixed rate of 4.32 per cent becomes more favourable.

"It's understandable that many borrowers are nervous about missing out by fixing too soon or being stuck on a tracker when the rates go up," said Richard Tolchard, senior mortgage product manager at first direct.

"Economists almost unanimous that rates won't increase this year," he added.

Defaqto recently revealed that almost 9,000 mortgage products have been brought to market or updated between April 1st and the end of June this year.

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2011-07-19 12:58:08 © Moneyextra.com