6 Aug

Tracker mortgages 'grew more popular' in July

Tracker mortgages 'grew more popular' in July

An increasing number of people are attracted to the advantages offered by tracker mortgages in the current economic climate.

According to loan adviser Mortgageforce, the level of interest in tracker mortgages - which use the Bank of England's base rate of interest as their repayment benchmark - increased last month.

In contrast, fixed-rate mortgages - which offer stability as they are not linked to changes in the base rate - declined in popularity, with 63 per cent of borrowers choosing these products in July, compared to 75 per cent in June.

Katie Tucker, technical manager at Mortgageforce, said that the trend shows that people are "fickle in their favour" and will be attracted by low repayment rates.

"Lenders released some storming tracker and discount rates in response to the rush on fixed rates in June, because bank and building societies' own loan sheets have to have a balance between fixed-rate customers and variable-rate customers," she explained.

Those borrowers who are currently on tracker mortgages were given good news today when the Bank announced it is to keep the base rate at 0.5 per cent.

Since it was cut in March, the interest rate has been at the lowest in the institution's history.


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