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Tracker mortgages 'good for people who can afford risk'
28 February 2008
With some analysts predicting interest rates dropping as low as four per cent, a tracker mortgage is looking increasingly attractive and is a good option for people who can afford the risk, according to experts.
A Reuters survey showed that a majority of economists expect another interest rate cut of .25 per cent in May, with economists at Capital Economics forecasting a gradual drop all the way to four per cent.
Such a cut in interest rates would benefit people who have a tracker mortgage as its interest rate, and therefore repayments will be linked to the Bank of England's base rate.
Louise Cumming, head of mortgages at the moneysupernarket website, said: "At the moment, if [affordability] isn't an issue with you, I would say a tracker rate is probably your best bet because I think the trend for rates is going to be down in the next 12 months."
