Tracker mortgages 'not the cheapest option'
moneysupermarket.com has said that, although fixed-rate mortgages have seen an increase over the last week, tracker deals are still not value for money.
A website has claimed that despite lenders increasing the interest on the fixed-rate mortgages recently, tracker deals are not the cheapest method of paying for a new home.Moneysupermarket.com conducted research which showed the difference in repayments between a tracker and fixed-rate mortgage at the moment and what it would be like following a two per cent base rate hike.
According to the website's figures, while tracker customers currently pay £121.33 less a month on a £300,000 mortgage, a two per cent rise would see fixed-rate borrowers' fees become £133.11 cheaper than on a variable loan.
Louise Cuming, head of mortgages at moneysupermarket.com, said: "Borrowers should not be seduced by the opportunity to make short term savings by opting for a tracker mortgage deal."
A tracker mortgage unveiled by the Co-operative Bank recently has been a big hit amongst homeowners, according to the company, due to its offer of 2.39 per cent interest for the first three years.
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