Tracker mortgages more popular in January

Published: February 13, 2008

There was an increase in the number of people taking out tracker-rate first time buyer mortgages in January.

That is according to figures from estate agency Andrews, which revealed that 35 per cent of new mortgages in the month were trackers.

It follows the Bank of England Monetary Policy Committee's (MPC's) decision to cut the base rate of interest by 0.25 percentage points in December.

The trend looks likely to continue after the MPC again voted for a 0.25 percentage point cut in February.

"This second fall in interest rates is a welcome respite for many borrowers who will see repayments on an average 25 year mortgage of £150,000 fall by around £45 per month since the end of last year," said Chris Chapman from Andrews.

"Market confidence has been boosted by the recent base rate cuts which have had a restorative effect on the market overall as buyers become more confident the current trend for reductions will continue as the year progresses," he added.

The MPC cut the base rate to 5.25 per cent in February, its lowest level since January 2007.