Experts recommend tracker mortgages

Julie Gaskin of GMAC-RFC, which is one of the UK’s largest lenders, is recommending that borrowers consider a Tracker Mortgage. She believes borrowers can protest their monthly outgoing during periods of interest rate uncertainty.

With a tracker mortgage the rate is set 1% above the base rate for a set period of time. If the base rate is 4.4% you pay 5.5% until the base rate changes.

It tracks along with the base rate. If the base rate goes up the lender cannot change the agreed rate but you benefit if the rate goes down. It can be expensive as the rate is always above the base rate.

Tracker mortgages are easier to manage for people struggling with changing interest rates.

Drew Wotherspoon of John Charcol agreed with her. He said that borrowers should opt for a tracker rather than a discount.

The Bank of England’s monetary policy committee recently published minutes showing most lenders were reluctant to make cuts to the base rate.

NOTE: Do not make any financial decisions based on the information on this page. Always take professional mortgage advice first

Mortgagefox offers a free mortgage advice

If you have any questions do not hesitate to contact our independent mortgage advisors at Mortgagefox.

There is no obligation with any of these services, and both are offered completely free. If you have specific mortgage question you want to ask then we will be glad to help.