Tracker mortgages 'more appealing'

Consumers looking for the best mortgage rates are more likely to opt for tracker deals in the near future, according to thisismoney.co.uk.

The claims come after Bank of England governor Mervyn King said interest rates are likely to remain low until the end on 2011.

In many cases tracker mortgage rates are better value than fixed-rate products as the rates mirror any movement in the Bank of England base rate, which has remained at a historic low for more than a year.

One of the lowest three-year tracker deals is available from Leek United Building Society which offers a cheap mortgage rate of 1.99 per cent above base rate for a borrower with 25 per cent equity.

In comparison the best fixed-rate with the same terms is 3.49 per cent with a £999 arrangement fee from Mansfield Building Society.

Principal researcher at data compiler Defaqto, David Black, says that lenders have increased the profit they make from tracker mortgages but the rates still remain attractive to borrowers.

A recent study by the Building Society Association revealed that the number of people who believe it is not the right time to buy property has increased from 21 per cent in June to 26 per cent in September.
 

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2010-09-21 11:51:04 © Moneyextra.com