Do tracker mortgage rates now offer a false sense of security?

Tracker mortgage rates are being forced up by lenders attempting to mitigate losses felt through absorbing low interest rates.

With the BOE base rate having sat at it's historic 0.5% low for over three years and market forecasters predicting this could continue for the foreseeable future, home-owners on tracker mortgage rates felt they had reason to be secure. After all if a tracker is fixed to the base rate, while it remains low so will mortgage repayments.

However such feelings of security may now be misguided.

It is recently come to our attention that the Manchester Building Society has reviewed it's tracker contracts and is able to exploit a clause allowing it to significantly increase it's tracker rates from 1% and 1.5% to 3.99 % and 4.74%.

A Manchester BS spokesperson has advised that decoupling its tracker mortgage from the BOE bank rate will only affect a small number of its customers. However market experts warn that this is just part of an ever increasing trend by mortgage providers to increase rates.

Deal Direct advise all mortgage-holders to check their original mortgage offers with a fine tooth comb. It is important to ensure there are no contract clauses allowing rates pegged to the low BOE bank rate to be increased.

With the possibility of tracker mortgage rates on the increase Deal Direct warn tracker mortgage holders to be vigilant and not continue with a potentially false sense of mortgage security.

Compare the mortgage market through us today to ensure that you are in a position to switch if your lender finds a loophole to allow a rate increase.