People with home loans should leave themselves the ability to switch between tracker and fixed-rate mortgages to get the best out of the current market, one expert has suggested.
Ray Boulger of mortgage broker John Charcol said that with the current Bank of England base rate set at 0.5 per cent, there is more incentive to choose a tracker deal.
He remarked: “There is now a strong argument for considering a tracker mortgage in preference to a fix, but ideally retaining the ability to switch to a fixed rate if and when deemed appropriate.”
According to Mr Charcol, this means opting for a product that has no or low early repayment charges (ERC) or an arrangement that has a drop-lock option, which enables the borrower to switch paying ERC.
Andy Pratt of mortgage broker Alexander Hall recently noted that there is an increase in people remortgaging because they believe a fixed-rate deal will be cheaper in the long-run.