Tracker mortgages looking more attractive with prospect of base rate reduction
Tracker rate mortgages are looking like a better bet following recent announcements in the UK and America.
The Bank of England is considering interest rate cuts as part of a broad range of “steps to support the economy and financial system” and the Federal Reserve has lowered its benchmark rate by 50 basis points.
More of Trinity's clients have been taking tracker rates because they think the base rate will come down they like the flexibility many of these products provide. Most borrowers almost automatically choose fixes at the moment even though they may not be the most suitable option.
Aaron Strutt, product director at Trinity Financial, says: "There is not a huge difference between the pricing of the cheapest fixed and tracker rates, so the trackers are a good option for those who like the prospect of the mortgage payments reducing."
Here is Trinity's selection of the best tracker rate mortgages.
| Lender | Initial rate |
Reversion rate for the remainder of the mortgage |
The overall cost for comparison |
Deposit | Fee | Incentive |
| NatWest for Intermediaries | 1.24% two-year tracker | 4.24% |
3.8% APRC |
40% | £995 | Purchase-only rate. 0.49% over the NatWest base rate. |
| NatWest for Intermediaries | 1.33% two-year tracker | 4.24% |
3.8% APRC |
40% | £995 | Remortgage-only rate. 0.58% over the NatWest base rate. |
| NatWest for Intermediaries | 1.32% - two-year tracker | 4.24% |
3.8% APRC |
25% | £995 | Purchase-only rate. 0.57% over the NatWest base rate. |
| Leeds Building Society | 1.39% two-year discount rate | 5.69% |
4.8% APRC |
25% | £999 | 4.30% off the 5.69% SVR. |
| Barclays for Intermediaries | 1.64% two-year tracker | 4.24% |
3.9% APRC |
15% | £999 | No early repayment charge. |
| Coventry Building Society | 1.85% Flexx for term | n/a |
2.0% APRC |
50% | £999 | No early repayment charge. |
| HSBC for Intermediaries | 2.09% two-year tracker | 4.19% |
4.0% APRC |
10% | £999 | £400,000 maximum loan. |
| Barclays for Intermediaries | 2.49% term tracker | 4.24% |
2.6% APRC |
25% | £1,999 |
Offset mortgage. 1% of the original balance charged on redemption for two years. |
Call Trinity Financial on 020 7016 0790 to secure a tracker rate mortgage
It does not always make sense for borrowers to lock into longer-term fixes because of the high early repayment charges.
We regularly speak to borrowers who have taken five-year fixes that regret the decision often because they want to sell their property, move in with a partner or refinance to raise cash.
Some of the banks and building societies are offering flexible tracker rates without early repayment charges so you are free to swap to another product when rates start to rise. A base rate rise seems some way off at the moment.
The biggest lenders tend to have the cheapest tracker rates including NatWest for Intermediaries, HSBC for Intermediaries and Nationwide for Intermediaries.
Coventry Building Society also has some excellent flexible offset products if you have cash in the bank not getting much of a return.
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