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Trackers superseding fixed-rate mortgages

Tue, 07 Aug 2007

Following figures from the price comparison website MoneyExpert.com, borrowers are being advised that the switch from their current fixed-rate mortgage is likely to cost over £6,000, even if the deal has become uncompetitive.

Whilst many borrowers may be able to switch mortgage loans for less cost, high penalties are often levied by lenders for borrowers looking to exit their loans. Sometimes these fees and restrictions are buried deep in the small print. Fixed-rate mortgages remain attractive to many borrowers, but they may not represent the best value for money, one broker argues.

John Charcol indicates that interest rates on fixed-rate loans could actually fall, following the Bank of England decision to maintain interest rates in August. Charcol say that interest rates have now peaked, at 5.75 per cent, and will now drop. Tracker mortgages could therefore offer better value for money than fixed-rate loans .
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