Tracker mortgages 'most popular during Q1 2010'

More consumers took out tracker mortgages than the fixed alternative during the first quarter of 2010, it has been reported.

According to Paragon Mortgages' Financial Adviser Confidence Tracker, 51 per cent of deals purchased between January and March will follow the Bank of England's base rate, up from 45 per cent in the final quarter of 2009.

Meanwhile, the proportion of fixed-rate mortgage business declined from 46 per cent to 43 per cent.

The finding suggests that consumers are expecting the Bank to keep interest rates low for the foreseeable future.

John Heron, Paragon Mortgages' managing director, said the proportion of borrowers opting for tracker mortgages has been growing since last summer as borrowers look to take advantage of low interest rates.

He commented: "Although there are some good fixed-rate deals available, the average rate on fixed-rate deals is still significantly higher than the Bank of England's interest rate, and they are becoming less popular with borrowers."

Earlier this week, the Monetary Policy Committee froze the base rate at 0.5 per cent – the historic low it has remained at since March 2009.

Moneyextra.com recommends you take independent financial advice before acting on any article

Back

2010-05-12 13:42:30 © Moneyextra.com