Mortgage Tracker Rates Fall Once Again

New data reveals that mortgage tracker rates have dipped for the third month in a row. Information from the Moneyfacts UK Mortgage Trends Treasury Report, due to be published shortly by Moneyfacts, will reveal another drop for the average two-year tracker rate mortgage. A drop of 0.08% was seen in April when compared with March, qualifying as the third consecutive month a fall in tracker rates has been seen in the mortgage market. The current average rate for a two-year tracker mortgage stands at 1.92%, compared with 2.00% in March this year. However, prior Treasury Report issues from Moneyfacts confirm this is not as low as the rates seen last June and November. In June 2017, the average two-year tracker was recorded as 1.88%. Meanwhile, November 2017 saw an average of 1.77%. Clearly, there is a way to go yet before the two-year tracker mortgage hits those lows. Tracker mortgages typically track the base rate in place at the Bank of England. They are usually worked out by adding a margin onto the base rate to produce the actual rate paid by the mortgage holder. It would seem odd, then, to see a fall in tracker rates at almost the same time the base rate is going to rise. Of course, we cannot be sure of a rate rise this year, but all the signs from the Bank of England point to a possible rise in 2018 at least. “We are used to seeing plenty of competition in the fixed-rate mortgage market,” said Darren Pescod, CEO of The Mortgage Broker Limited. “However, many lenders are starting to realise there are customers to be had in the variable-rate market as well. A tracker mortgage is simply another version of a variable-rate mortgage, so it makes sense lenders would begin to look at this area too. I wouldn’t expect to see huge demand in this corner of the market, but the drop in rates does indicate a market is there, and that lenders are willing to cater for it.” Many people are looking to lock into a low fixed-rate mortgage to give themselves peace of mind in the coming years. This is a smart decision, especially given the impending rate rises on the horizon at the Bank of England. Even if we do not see a rate rise this year, all signs are pointing towards rises coming soon. So, while competition for tracker-rate mortgages may be higher than previously thought, it may not remain this way for very long. Rates are still slightly above those seen this time last year, and if the base rate does increase, so will tracker rates. For many, fixed-rate mortgages represent the best way to go when looking for a good deal. However, there will no doubt be some who are keen to follow the tracker rates at present – especially when they are around 0.5% or more below the average fixed rate deals.