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Trackers which are now so cheap that based on the City’s Base Rate forecast they will always be cheaper than even the best current fixes. There has been much interest rate speculation this year that many borrowers are in a quandry as to what type of mortgage rate to choose. Their prayers have been answered by a number of exceptionally low rate tracker mortgages that are currently on the market - such as BM Solutions Base Rate minus 0.76 per cent for two years. If the City’s expectations of Base Rate peaking at 5 per cent are correct, the rate on this deal will peak at 4.24 per cent, cheaper than any currently available fixed rate without extended penalties.
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The problems that are faced by first-time buyers have been well documented for some time now. At the close of 2002 first-time buyers accounted for 39 per cent of purchase lending, now it is only 28 per cent. Although more lenders have adopted the affordability approach to calculating the amount they are willing to lend, too many still base their lending decision on outdated, perhaps even archaic, income multiples. For some time now we have been in a low interest rate, low unemployment and low inflation environment, it is time affordability and the way it is calculated is brought into the 21st century
