Cheap tracker mortgage deals on offer for those willing to take a risk.
Competitive tracker mortgage rates are currently on offer for those home-owners willing to gamble that the BoE base rate will remain low for the next few years.
Not all home-owners are willing to take this chance therefore for them a fixed rate could be a better option.
Tracker mortgage rates move up and down in line with the base rate and start at a lower price than lenders fixed rate deals.
At present the cheapest tracker rate is offered by NatWest for new purchase at a rate of 2.69%, which compares favourably to the best 2 year fixed rate of 3.34%. The base rate would need to more than double before the tracker repayments rose higher than those on a 2 year fix.
Tracker mortgage rates remain cheaper than fixed rates because risk averse home-owners are willing to pay a premium for security.
Depending on which forecaster you follow a base rate rise is not predicted until between 2014 and 2016, and as the base rate will not rise for sometime to come, the risk in choosing a tracker mortgage may be not a high as you think.
The IMF has even suggested that the BoE could consider dropping the base rate to 0.25% or 0%, therefore home-owners on trackers could be set to benefit even more from a drop in mortgage payments. However on this point you need to check any mortgage offer as lenders may insert a clause to stop repayments falling below a certain level.
If you are looking for the best tracker mortgage rates currently on offer contact Deal Direct for a mortgage market comparison today.
Deal Direct will source a competitive tracker mortgage offer for you.
