Tracker Mortgages Still An Attractive Choice

Tracker Mortgages Still An Attractive Choice 1

Tracker Mortgages Still An Attractive Choice
First time buyers are still being advised to​ seriously consider opting for a​ tracker mortgage,​ despite growing rumours of​ a​ rise in​ interest rates before the​ end of​ the​ year.
Although the​ Bank of​ England moved to​ hold interest rates at​ 4.5 per cent recently,​ speculation is​ mounting that a​ quarter point rise will be enacted before the​ start of​ 2018.
However,​ Moneysupermaket argues that those currently looking for mortgages should not automatically discount the​ idea of​ a​ tracker mortgage,​ where repayments are dependent on​ the​ interest rate,​ as​ rates have also risen in​ the​ fixed rate mortgage sector.
The cost of​ a​ fixed rate mortgage has already risen by an​ average of​ five per cent since August last year (2018),​ despite the​ bank freezing the​ underlying cost of​ borrowing .​
Moreover,​ wider influences in​ the​ financial market mean further increases are likely.
Assuming that the​ interest rate remains around 4.75 per cent for the​ next couple of​ years,​ Moneysupermarket argues that it​ would be silly for home buyers to​ automatically opt for a​ fixed rate mortgage,​ as​ better bargains can often be found in​ the​ tracker market.
It's not always as​ clear cut as​ fixed mortgage or​ tracker mortgage,​ Moneysupermarket's Louise Cuming was quoted as​ saying recently.
What people should be asking themselves is​ whether they are already at​ the​ top level of​ affordability when it​ comes to​ their monthly outgoings .​
If so,​ and if​ even a​ small rise in​ base rates would stretch this,​ then they would be wise to​ opt for a​ fixed rate mortgage,​ she recommended.
Ms Cuming continued to​ say: If they have some leeway available in​ their finances then they would be better off with a​ tracker mortgage because,​ ultimately,​ all the​ pointers indicate that rates are unlikely to​ rise significantly in​ the​ next two years.
© Adfero Ltd

Tracker Mortgages Still An Attractive Choice

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