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Tracker mortgages 'could be a better option than fixed-rate deals'

By Jonathan Dawes, Thu 24 Jul 2008 - Published in Mortgages

People looking a new mortgage should compare money-saving deals from as many providers as possible before making a decision, according to moneysupermarket.com.

Research by the website at the beginning of June showed there was little to choose between the average two-year fixed-rate loan and the average two-year tracker.

However, subsequent research by the group has since found the average tracker currently stands at 5.9 per cent, the lowest rate since March, while the average fix is about 6.45 per cent.

Louise Cuming, head of mortgages at moneysupermarket.com said in an uncertain economic climate it is natural for people to favour more secure fixed-rate deals.

However, she added current interest rates mean trackers could be a better option as "all the signs are that rates will be kept on hold for the time being, with the next movement potentially being a reduction".

Earlier this month, Savills warned house sellers could be facing a period of "significant frustration".