"To say the mortgage market has been an enigma of late would be an understatement of epic proportions. With news, most of it negative, emanating on a daily basis, borrowers could be forgiven for not knowing whether to fix, track, cap or offset,” said Drew Wotherspoon of Charcol.co.uk.
“However, with news from the Bank of England on inflation revealing a marked increase, and indeed an expectation of an equally marked decrease to come, it now seems highly probable that bank rate will fall sharply in 2009. As such, any borrower who does not require the absolute security of a fixed rate mortgage would simply be crackers not to take a tracker at the moment.
“Trackers are currently priced at around 0.3% better than their fixed rate counterparts, so borrowers will immediately see less coming from their wage packet if they arranged a new tracker now over a fixed rate. Yet with at least one per cent predicted to disappear from bank rate, this gap will widen significantly over the coming months.
"It is also worth noting that there will be a time when fixed rates are the right product for most of the market. Therefore, borrowers may want to look at trackers that offer a drop lock option, allowing them to drop and lock into a fixed rate at any time should they wish to."
