12 Aug

Homebuyers 'opt for fixed-rate loan as gap with tracker mortgages narrows'

Homebuyers 'opt for fixed-rate loan as gap with tracker mortgages narrows'

More homebuyers are taking out fixed-rate mortgages as a result of the narrowing gap with tracker loans, according to one opinion.

Senior technical manager at John Charcol Ray Boulger said that the mortgages are becoming more appealing because the offers on tracker rates have increased in price.

"The gap between trackers and fixed-rates has narrowed and fixed-rates are looking better value," Mr Boulger added.

He stated that the loans were particularly favourable for people looking for five-year or longer term mortgages.

His comments come after the Council of Mortgage Lenders (CML) reported earlier this week that nearly half of all mortgage borrowers opted for a fixed-rate loan in June.

This represents the highest proportion of homebuyers taking out these types of mortgages in 2010.

Mr Boulger said that this has come despite the Bank of England announcing that its base rate will remain at 0.5 per cent earlier this week.

The mortgage professional stated that the falling costs of fixed-rate products and the rise in price of tracker ones is the likely reason behind CML's findings. ADNFCR-1222-ID-800023153-ADNFCR

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