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Tracker mortgages now more costly
Thu, 03 Apr 2008
Those looking to switch to a tracker-rate mortgage face paying more than they did at the end of last year, despite recent cuts in the Bank of England base rate, it has been claimed.

David Black, principal banking consultant at Defaqto, explained that in July 2007, the average interest rate on a two-year tracker-mortgage was 0.49 per cent more than the base rate, a figure which has now increased to 1.17 per cent.

Mr Black said: "With banks and building societies trying to repair their balance sheets in an atmosphere of financial mayhem, it is hardly surprising it is the poor consumer who is caught in the middle and is having to pay more for less choice."

He added that the situation is reminiscent of the day when mortgage lenders thought they were "doing you a favour by offering you a mortgage ".

Yesterday, Michael Coogan, director general of the Council of Mortgage Lenders said that people coming to the end of the fixed-rate mortgage deal need to start preparing now as they could see their payments rise dramatically.

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