Tracker mortgages 'may become more costly'

Date:Wednesday 1st July 2009
Author: Max Freedman

Although they may be attractively priced currently, tracker mortgages could become more costly over coming months.

This is according to, which pointed out that the UK's base rate of interest is predicted to rise this year.

It said that, while many trackers are now cheaper than their fixed-rate counterparts, this would be reversed if the base rate was to increase by one per cent.

Louise Cuming, head of mortgages at, commented: "Borrowers should not be seduced by the opportunity to make short-term savings by opting for a tracker mortgage deal."

They must consider the expected base rate rises and ensure they can still afford repayments when the Bank of England begins to reverse the cuts, she added.

Last month, Legal & General revealed that 87 per cent of residential borrowers in the UK opted for fixed-rate mortgages during the second quarter of this year.