Hybrid mortgages are becoming more popular

Track and fix hybrid mortgages could be the ideal choice for many homeowners in the UK, according to MyMortgageDirect.

John Charcol recently claimed that December was the strongest month yet for the hybrid deals, with ten per cent of the independent mortgage advisors' customers choosing one of the products.

Simon Collins, technical manager at the firm, explained that at the moment many people are reluctant to take out fixed-rate deals due to the excellent variable rates on offer, however they like the security of being protected from rate rises in the next five years.

A hybrid mortgage offers the ideals solution to this dilemma as it give consumers the best of both worlds.

It involves a mortgage offered that tracks the base rate for two years, followed by a three-year fixed period, ensuring that homeowners benefit from the initially low rates.

Catherine Hearnden, director at MyMortgageDirect, said that they are often a good choice for homeowners but many will be unaware of them.

"I think they are a really good idea because people are not keen on fixing now because rates are low and everyone has got it in their head that rates will increase. You have got the benefit now of a tracker, but you know that your rate will not increase between years three to five. They are a very good option," she explained.

However, as it is quite a new thing, some lenders do not offer them and many people are still going for traditional fixed or tracker deals unaware that there is a middle ground.

This highlights the importance of seeking out advice, Ms Hearden explained, as without it homeowners are not armed with all of the information they need to make an informed decision about which mortgage suits their circumstances.

She added that hybrid deals are something that most high street lenders won't offer.

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2012-01-19 14:29:15 © Moneyextra.com