Tracker mortgages 'may be better value than fixed-rate products'

Date:Friday 17th July 2009
Author: Susanna Kavka

Tracker mortgages may represent better value now than their fixed-rate counterparts, broker firm John Charcol has said.

According to the organisation, the cost of fixed-rate home loans rose in June, with many lenders increasing their rates for five-year mortgages by one per cent.

Ray Boulger, senior technical manager at the firm, said: "In general, lenders have at best left their fixed rates unchanged and some, including Northern Rock, have further increased their fixed rates, as a result of which many now look expensive."

He added that too much of the anticipated rise in the UK's base rate of interest is now being factoring into the costs of fixed-rate mortgages.

Mr Boulger went on to say that the best value tracker deals are generally lifetime ones or those with a droplock option.

Recently, Jane King, mortgage advisor at Ash-Ridge Private Finance, expressed a similar view, saying that consumers would be well-advised to secure tracker products in the current market.