Tracker or Fixed Rate

The biggest question most lenders are asking is whether to get a fixed rate or a tracker mortgage – and there is no clear, easy answer!

The economy is still relatively weak and the Government cuts will only depress demand in the short-term, but on the other hand inflation remains high and is not dropping anywhere near quick enough to meet the Bank of Englands 2% target. So raising rates will tackle inflation but harm the economic recovery.

My feeling is that a 2 year fix and a 2 year tracker will offer roughly the same cost over the 2 years, but a 5 year fix now will work out cheaper than a tracker over the 5 years. So I am leaning towards recommending five year fixed rates, although this would obviously depend upon peoples circumstances, so do not take it as a recommendation!

This entry was posted on Wednesday, August 18th, 2010 at 11:22 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.