Trinity's clients in the i newspaper - ‘We’ve risked a tracker mortgage. It’s saving us £3k a year… if rates don’t go up’
“Things could go completely against us, but the way things are at the moment I don’t think we’re in a position where the interest rate will go up by a whole percentage point.”
These are the thoughts of Trinity Financia's client Roopesh Darbar, who has just taken out a tracker mortgage at 5.5 per cent on the property he owns with his wife in east London.
The dad of two knows that each Bank of England interest rate rise in the next two years will mean an increase in his mortgage costs while he stays on the product, but says the family have taken a “calculated risk”, which is currently saving them money.
Aaron Strutt of Trinity Financial explained that many borrowers were taking a shorter-term view on mortgages with the aim of refinancing in a couple of years.
“There is quite a significant difference between the rates on two-year fixes and two-year trackers, especially if you have a chunky mortgage. You can see the logic in taking a tracker” he said.
“Borrowers understand there are risks when opting for a variable mortgage, but many think that given the upheaval recent rate rises have caused, the monetary policy committee with not vote for many more base rate rises.”
But he added that tracker rates were “not for everyone”.
“Many people like financial security, particularly after watching the mortgage market chaos unfold over the last year. Tracker rates are generally taken by people who prefer to take more of a risk and often have funds to cover the additional payments charged if and when the base rate rises,” he said.
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