Replace fixed mortgages with trackers, experts say

03 August 2010

Written by David Whittaker

Experts have advised that people opt for tracker mortgages as the Bank of England base rate is expected to remain at 0.5 per cent for up to four more years, according to one newspaper.

The Guardian explained that economists from the Ernst & Young Item Club predicted that, as the government's austerity measures slow the growth of the economy, the rate will stay at this historic level until early 2014, while the Centre for Economics and Business Research said it would last to the end of 2011 at least.

Writing for the publication, Rupert Jones described taking out a tracker home loan as a "no-brainer" for those looking to purchase property.

He also reported that Barclays' Woolwich mortgage arm had recently launched the "drop lock" on their products, which allows customers to switch to a fixed-rate deal without being charged for early repayment.

The Association of Mortgage Intermediaries argued in its latest Quarterly Economic Bulletin that a "practical solution" must be found to support the home loan market as the withdrawal of the Special Liquidity Scheme in April 2011 will make it more difficult for lenders to fund borrowing.

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