Tracker mortgages offer the best deal on the market, as financial experts predict that interest rates will fall sharply in the coming months.Mortgage
specialist John Charcol has said that economic data points to a significant drop in interest rates next year, the broker said in its weekly product and market commentary, and therefore, for those who do not need the certainty of a fixed rate mortgage
, fixed rate mortgages
are the sensible option.
"To say the mortgage market has been an enigma of late would be an understatement of epic proportions. With news, most of it negative, emanating on a daily basis, borrowers could be forgiven for not knowing whether to fix, track, cap or offset." commented Drew Wotherspoon of Charcol.co.uk.
However, while inflation has been soaring, there are expectations of a similarly significant drop, so it seems "highly probable" that the Bank of England base rate will fall sharply in 2009, and therefore anyone who does not require "absolute security" about their monthly outgoings, "would simply be crackers not to take a tracker at the moment" Mr Wotherspoon added.
Even in the near future homeowners could see the benefits, he continues, because the average tracker mortgage is already about 0.3 per cent below the average fixed rate – a gap which could become considerably larger if the base rate is cut from five per cent down to four per cent as some experts predict.
Those who do need the reassurance of a fixed rate should hold off for as long as possible to give rates a chance to come down so that they can fix at the most competitive rate, because they're coming down as well.
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