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    Homebuyers select tracker over fixed-rate mortgages

    10/01/2008

    New research shows that people are now selecting a tracker mortgage over fixed rate mortgages.

    Fixed rate mortgages have dropped for the fifth time in succession from 68 per cent in October to 65 per cent in November.

    Homebuyers are thinking about remortgaging their home, what seems to slow this process down for them is the penalty fees, which are involved if they decide to switch lenders.

    CML stats show the number of remortgages unapproved, nearly 21 per cent during November period.

    Entire gross lending dropped 10.4 per cent to £30 billion compared with £33.5 billion in October. Many borrowers have selected fixed rate deals, leaving them to not see any immediate benefits from another change in the base rate.

    Borrowers which have selected tracker rate mortgages will notice their costs decrease as the base rate cuts.

    Mr Coogan added: ‘Each lender will make its own commercial decision on whether to change its SVR to follow a base rate move, depending on its risk profile, cost of funds, and business focus.’


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