First time buyers attracted to tracker mortgage deals
Expectations of future cuts in interest rates have led to a “greater appetite” for tracker rate mortgages, one expert has claimed.
Sue Anderson, a spokesperson for the Council of Mortgage Lenders, explained that while first-time buyers have traditionally been more attracted to fixed rate mortgages, changing economic conditions are also changing attitudes.
Anderson said: “At the moment the situation is complex because there is some anticipation that rates may fall again this year so there is greater appetite than what there would normally be for tracker rates, which will take advantage of rates if they do fall further.”
However, she added that in opting for a tracker mortgage, first time buyers are taking something of a risk as their payments could increase in future.
Last month, the CML reported that there had been a move away from fixed rate mortgages.
Its figures showed that fixed rates represented 57 per cent of loans in January 2008, down 20 per cent on the figure for July 2007.
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