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MONEYFACTS ARCHIVE. This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Derin Clark

Derin Clark

Online Reporter
Published: 13/08/2019

There are only 242 tracker rate mortgages available in the market, which accounts for less than 5% of residential mortgages overall, the latest Moneyfacts UK Mortgage Trends Treasury Report has found.

The report also found that not only are there few tracker mortgages available, but consumers are overwhelmingly choosing to opt for fixed rate mortgages instead, with nearly 92% of all new advances approved during the first three months of 2019 for fixed rate mortgages.

Tracker rate mortgages (residential only)

Number of products Average rate Products containing a collar Average rate (with collar) Average collar rate
242 2.18% 23 2.08% 2.00%

Source: Moneyfacts Treasury Reports

Darren Cook, finance expert at Moneyfacts, said: “It is unclear in which direction the next Bank of England base rate change will be going, but current futures markets indicate that it may be on the way down, so it is surprising that we see so few tracker rate mortgages currently available in the market. The tracker rate sector seems to be competing against near rock bottom rates on fixed mortgage deals, and a large majority of borrowers are taking advantage of these low rates.

“There are currently only 242 tracker rate mortgages available in the market, of which almost one in 10 (9.5%) have a collared rate, meaning that even if the Bank of England does decide to cut base rate – which this type of mortgage tracks – borrowers would not necessarily see a benefit.

“In fact, 20 of the 23 collared tracker rate mortgages currently available are collared at the initial rate of the tracker product, so borrowers will see no rate fall and no reduction in their monthly repayments if the base rate is reduced, but would see their monthly repayments increase if there is a base rate hike.

“The choice between opting for a tracker rate mortgage or a fixed rate mortgage is down to the risk appetite of the potential borrower, but with nearly 92% of advances currently being fixed, it seems that nearly all borrowers are choosing to be risk-averse during this period of economic uncertainty and favourable fixed rates.”  


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