Mortgage lender sees tracker rise in popularity
July saw more homeowners opt for a tracker mortgage than the previous month, according to one broker's figures.
Mortgageforce analysed the number of home loan applications submitted by its customers in the month of July and found that 37 per cent had chosen a tracker deal, compared to 25 per cent in June.
While fixed-rate mortgages still accounted for the majority of all housing loans applied for over the month, at 63 per cent, tracker deals are making headway in the market.
The mortgage lender believes that this shows the fickleness of borrowers and their penchant for following whichever deals have the best headline rates - two months ago it was fixed-rate deals but these saw a sharp rise in interest over recent weeks.
Katie Tucker, technical manager at Mortgageforce, added that banks and building societies need to balance their sheets as well, leading to many improving the offers on tracker deals in order to redistribute the number of loans being taken out.
In offering advice to those looking for a mortgage in the current climate, Ms Tucker continued: "The best deals at the moment have little or no early repayment charges, because they give the flexibility of remortgaging away in the next year or so, if an increasing Bank rate does cause their payments to go up and they want to switch to fixed-rate."
Mortgage lender Nationwide Building Society recently increased competition in the market by announcing that it is cutting the interest of both its fixed-rate and tracker deals.
Some 44 of the mortgages will see reduced rates of up to 0.5 per cent and it is thought the move is an attempt to draw in new homeowners with large deposits.
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