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Tracker mortgages still a good option, expert claims

Fri, 08 Dec 2006

Tracker mortgages will still prove popular among borrowers following the Bank of England's decision to hold the base rate at five per cent, one expert has claimed.

Ray Boulger, senior technical manager at mortgage lender John Charcol, stated that while the decision may have been a "foregone conclusion", recent comments by Bank of England governor Mervyn King also suggested the bank is unlikely to raise rates in the near future.

This means that tracker mortgages are likely to remain a good option for buyers, the expert said.

"For those borrowers who don't need the interest rate security provided by a fixed-rate mortgage, trackers continue to look attractive and a tracker with a droplock option provides an added benefit for borrowers who would consider a fixed rate if their rates fall," remarked Mr Boulger.

Droplock facilities allow borrowers to change from a tracker to a fixed-rate mortgage .

However, Mehrdad Yousefi, head of intermediary mortgages at Alliance and Leicester, asserted that fixed-rate mortgages may prove the best option for borrowers wishing to be "cautious".

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