Mortgage type 'a personal choice'

Choosing between a tracker and fixed-rate mortgage is always a personal decision, one financial expert has indicated.

Nigel Pascoe, director of lending at Skipton International, said the guarantee of a fixed rate appeals to some consumers, while others prefer to take a risk on the Bank of England's base rate remaining low.

He suggested that many consumers feel uncertain about the general direction of interest rates, explaining that demand for fixes always intensifies when rate rises are predicted in the press.

"Ironically, by then it can be one of the worst times to fix a mortgage loan rate, as the products offered by banks and building societies will reflect the expectation of more upward rates movements over the short term," he stated.

Mr Pascoe said it is important for each individual consumer to understand the impact of interest rates on mortgage quotes, in order that they can make an educated decision that suits their circumstances.

Ray Boulger, senior technical manager at John Charcol, claimed this week that five-year fixed-rate mortgages may work out cheaper for consumers in the long run.

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2010-05-25 13:32:33 © Moneyextra.com