Try getting a mortgage deal with nice and low repayment rates and chances are you'll come up dry as recently lenders have become increasingly choosy over who gets their money and many people have found themselves priced out of the mortgage and house buying game having to resort to renting or delaying their move out of the box room at their parent's house.
It is almost impossible to get a decent rate on fixed term mortgages now, lenders are more suspicious with borrowers and the general consensus is to charge higher rates in order to guarantee getting as much of their investment back. There is plenty of noise over the subject of fixed mortgages because lenders do not seem to be reacting to the Bank of England's swap rate for banks reaching a threshold recently. Despite this many lenders like Halifax and Nat West have continued to increase rates for fixed term mortgages of 2, 3 and 5 years.
So what's the alternative? Well tracker mortgages are becoming more popular as they follow the Bank of England's base rate which recently dropped to an all time low of 5%. Normally tracker mortgages work out as being cheaper than fixed mortgages for the first two or three years but then rise to a more expensive rate once the period is over.
The life line in this story seems to be lifetime trackers. Lifetime tracker mortgages will follow the base rate to an extent for the entire length of the mortgage. Analysts say that by doing this you stand to save thousands of pounds by not only undercutting the fixed rate mortgages but also by not having to pay the fees and charges associated with a Remortgage ever again!
Some lenders are even trying to entice some struggling home buyers with low rates (some at 5.89% currently in July) but even better: No upfront fees or early repayment charges. The benefits of this lack of fees are further boosted by the safe knowledge that your tracker mortgage is not going to fall victim to arbitrary price hikes should something major occur in the industry.
For now mortgages remain elusive and awkward to get with attractive rates, but as this news proves, some lenders are recognizing the desperation in the housing market and aim to provide some form of savings to the house buyers.
If you are confused about mortgages and whether to go for fixed or tracker then check with as many sources of info as you can. If you're coming to the end of a fixed mortgage then perhaps you should consider a remortgage to a different type or company. A Mortgage is a big commitment and you should take time to make a decision before signing up.