Type Of Mortgage

[potiche]

Daughter choosing new mortgage product for just over half the value of house. Top of list is Fixed 2yrs or Tracker. Have read base rate liable to drop so was thinking Tracker best but who knows?

[fiction-factory]

I think any temporary (small) reduction in base rates could soon be followed by an increase in the base rate in order to address inflation (because of higher import costs due to falling pound) and to try to strengthen sterling. Even if base rates fall mortgage rates generally are unlikely to fall and certainly lenders will be lending less money

[ubasses]

She needs to read carefully what exactly is on offer, like fixed rate Mortgages, most Trackers are for a limited period only. If interest rates do suddenly start to go up it can add quite a bit to the monthly payment during the period of the agreement, and many of them have a 'collar' below which the rate will not reduce even if rates go negative.