Potential falls in interest rates will not benefit a third of homeowners who will still choose a fixed rate over a tracker deal the next time they remortgage, research from Lloyds TSB has found.
Lloyds TSB asked 1,000 homeowners that are due to remortgage by the end of 2007 if they thought interest rates would fall during the coming months, to which 60 per cent replied that they believed they would; despite this, one in five will not trust their instincts and instead will go for a fixed rate deal that removes any risk of being caught out by rates rising unexpectedly.
In order to help people follow their instincts without the risks, Lloyds TSB are offering a combination of the two most popular forms of mortgages – the Track & Lock, which follows the base rate but allows customers to lock into any Lloyds TSB fixed rate deal at any time, without incurring penalties for early repayment.
Lloyds TSB believes that removing the element of chance and potential risk will enable customers to benefit when the interest rate falls, while being safe in the knowledge that they can lock onto a rate for safety if rates begin to rise.
Alison Burns, director of network mortgage sales, Lloyds TSB comments:
“Having witnessed five rate rises in two years, it’s not surprising some consumers are reticent to take a gamble on rates not rising again. Currently just 15 per cent of homeowners have a tracker mortgage but as thousands face increased monthly repayments they need to consider all the remortgaging options available.”
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