Following the recent hold in the Bank of England Base Rate (BBR), it has been suggested that borrowers coming off fixed rates mortgages would face the highest level of repayments yet. Average fixed rates now stand at above 6 per cent – a huge rise from the 4.6 per cent rates that were agreed two years ago.
However the popularity of tracker mortgages was predicted to revive, especially among remortgagers coming coming off low fixed rate deals in the coming months. With industry commentators believing that interest rates have peaked, several lenders have re-introduced tracker mortgages to their ranges.
Tracker products to recently hit the market include two-year deals from the Co-operative Bank and Chelsea Building Society, with the former offering BBR minus 0.66 per cent, giving a pay rate of 5.09 per cent, and the latter offering a rate of BBR minus 0.56 per cent, giving a pay rate of 5.19 per cent.
Despite the market expectancy of a rise in tracker mortgage products being taken out, Paul White, consultant at Belgravia, suggested that fixed rates would remain the most popular option as people looked for certainty, peace of mind and the ability to budget ahead.
He said: “Most people are quite keen to fix as they focus on the upside rather than the downside.”
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