New buyers opt for tracker mortgages

There is an increased appetite for tracker-rate mortgages among first-time buyers.

That is according to the Council of Mortgage Lenders (CML), which said that predictions of further interest rate cuts are fuelling the trend.

First-time buyers are traditionally more inclined to take out fixed-rate deals but the CML has witnessed increased interest in tracker mortgages.

The majority of analysts believe that the base rate will be cut at least once more in 2008 and first-time buyers appear to be keen to benefit from this.

"In the normal course of things, first-time buyers have tended to be more attracted to fixed-rate mortgages recently than variable-rate mortgages," said Sue Anderson, CML spokesperson.

"But at the moment the situation is complex because there is some anticipation that rates may fall again this year so there is greater appetite than what there would normally be for tracker-rates, which will take advantage of rates if they do fall further," she continued.

The base rate of interest currently stands at 5.25 per cent following rate cuts in December and February.

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