Borrowers opting for tracker mortgage deals
Tracker or variable rate mortgage deals are growing in popularity as borrowers look towards a drop in interest rates.
Last week's decision from the Bank of England's monetary policy committee (MPC) may have kept interest rates at 4.75 per cent for the tenth consecutive month, but research shows that borrowers are choosing tracker deals to reflect their growing optimism about interest rates.
According to Mortgages Direct, the number of borrowers taking out tracker and variable rate mortgages increased by eight and six per cent respectively over the past month.
"It appears consumer confidence has switched and there's a growing belief that the Bank of England will decide to lower the interest rates in the imminent future," Peter Gladdy, director of Mortgages Direct, told the Scotsman.
Financial analysts are divided about the likelihood of a cut in rates in the near future. Ray Boulger, senior technical manager at independent mortgage adviser Charcol, believes the MPC is likely to vote for a rate cut this summer.
However, other analysts, including Neil Cumming of Hitchens Investment Management, believe that a cut in rates is not likely to come until next year.To compare mortgage rates, click here.
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