Tracker deals 'the cheapest mortgages at present'

Mortgage approvals increased by 12 per cent in February and have risen by nearly 50 per cent in the past year, according to the Council of Mortgage Lenders CML.

The report also shows that fixed-rate mortgages accounted for 47 per cent of the market in February – the lowest share for around five years.

Ray Boulger, senior technical manager at John Charcol, said tracker products are clearly offering "better value" than fixed-rate mortgages at the moment, and are likely to occupy a larger share of the mortgage market in the coming months.

Mr Boulger noted that this time last year, homeowners could get a five-year fixed rate cheaper than is possible in the current market.

"I would expect the CML figures to show a continuation of this trend for the next few months – I think you will see the proportion of fixed-rates continuing to fall on the CML reports for at least the next two or three months," he said.

Mr Boulger added that the rise in mortgage approvals in February was likely to be due to January's bad weather and the "catch-up process" that took place in the following weeks.

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2010-04-15 13:09:24 © Moneyextra.com