Tracker mortgages provide strong competition for fixed-rates
by Gill Montia
Moneysupermarket.com is alerting homeowners to the fact that the average two-year tracker mortgage is offering increasingly good value.
The price comparison website’s weekly credit crunch monitor shows that at the beginning of June, there was little difference between the cost of the average two-year fix and the average two-year tracker.
However, the latest update puts the difference at over 0.5%, in favour of the tracker.
According to Moneysupermarket, interest on the average tracker stood at 5.9% at the beginning of this week, as compared with 6.45% for the average two-year fix.
The firm’s head of mortgages, Louise Cuming, urges borrowers to look beyond the security offered by a fixed-rate deal and consider the whole range of loans available.
Ms Cuming believes that while interest rates are difficult to predict in today’s turbulent economic climate, rates are likely to be kept on hold in the short-term.
Meanwhile, some analysts are predicting that policymakers will be forced to reduce rates by the end of the year to kick-start the economy, making the tracker even more attractive.
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