Halifax has followed in the footsteps of Abbey, Alliance & Leicester and Lloyds TSB, by re-introducing tracker mortgages to its home loan range.
However, none of the lenders have reflected the base rate cut of 1.5 per cent. The Bank rate now stands at just 3 per cent and is expected to fall further early next year, yet the lowest Halifax two year tracker mortgage
rate available to new customers is now 5.09 per cent with up to 60% Loan-to-Value and fee of £995, which is more than two percentage points above the base rate.
In addition, all of the tracker mortgages available from Halifax
, Lloyds TSB
and Alliance & Leicester
are only available to customers with at least a 25 per cent deposit.
Meanwhile, as tracker mortgages are grabbing headlines, it seems that fixed rate mortgages
are being over-looked.
According to Moneyfacts.co.uk, the average two year fixed rate is now 6.13 per cent, compared with two-year swap rate at just 3.61 per cent.
Commenting on the high fixed rates, analyst at moneyfacts.co.uk, Michelle Slade, said: "The average rate on fixed rate mortgages over the past few months has remained almost constant, despite the funding cost to lenders reducing significantly.
"Since the cut in base rate, the average fixed rate has dropped slightly but nowhere near the amount we would expect. Even allowing for a larger risk margin, the rate should be at least one per cent lower, if not more."
However, moneysupermarket.com has pointed put that on top of fixed rate mortgages remaining unchanged and tracker mortgages not reflecting the base rate cut, Standard Variable Rates (SVR) are 'back in vogue', and could cost a fortune if consumers are reverted to them unawares.
Commenting, Louise Cuming, head of mortgages at moneysupermarket.com, said: "Borrowers should make sure they are fully aware of the rate their provider moves them on to at the end of their deal, and do the necessary shopping around to see if there is a deal which suits them better.
"This isn't just the lowest number in the high street window, borrowers must factor in the arrangement fee, deposit required and whether or not their credit record will enable them to get the deal they want."
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