Trackers more popular than Fiixed rates Wednesday, 18th November 2009

The take up of fixed rates has been steadily falling and been overtaken by trackers that track the Bank of England Base Rate These are currently proving by far the most popular with borrowers.

According to the monthly mortgage index issued by mortgage brokerage John Charcol, About 75% of people are going for base rate tracker indicating that homebuyers believe that interest rates are unlikely to rise substantially in the foreseeable future.

Where fixed rate dominated the market during the middle of the years so they have now fallen back to just 25% approximately of the mortgages being bought.

There has been a fast change in mortgage pricing over the last few months and this has resulted in trackers being much more competitive than their fixed rate counterparts. With the outlook for interest rates little changed over the last month an even higher proportion of borrowers chose a variable rate mortgage, in most cases a tracker.

With fixed rates stuck on such a high level there and with the climate for interest rates to be seemingly stable at a low comparative level there is no reason to look to fixed rates for the next year or so.

It is hoped that lenders will introduce more high loan to value mortgage soon so that the mortgage market can be moved on to better things.