Many experts are saying that a 5 year tracker mortgage represents the best value for money in the current climate. But is this the best business you can do, or are there in fact better deals to be had?
These are soaring in popularity, as the economy prepares for a slowdown in the property market meaning the Bank of England will almost certainly cut rates. So naturally if you're in the market for a new agreement, now is a decent time to put your money behind a relatively short term tracker agreement.
I'd probably question whether a 5 year tracker mortgage is the best thing to get tied up with though. 2 years seems like a much safer bet as 5 years is enough time for things to turn around and bite back. It's possible to get ones that allow you to switch to a fixed rate at any point in the arrangement, and this is something you should definitely insist is included. After all, if things aren't going your way, you can rest easy knowing you can revert to a steady repayment plan.
If you're the kind of person who likes to budget evenly and doesn't want to take risks then you'll want to stay away from a 5 year tracker mortgage and any other one for that matter. Even expert analysts can't predict what decision the Bank of England will come to when deciding what to do with interest rates, so its impossible to plan how much you'll have to pay at any one time.
A variable tracker mortgage does mean that you will benefit from any drop in the base rate, and so if this happens you know you'll never be paying significantly more than anyone else. This is the kind of flexibility you don't get with a fixed rate agreement. You might agree a long term deal of 5.5% interest which seems competitive at the time, but a year later can be significantly above market value.
Going back to my original question of whether a 5 year tracker mortgage is a good idea, well, it depends on what kind of agreement your mortgage broker can get you. Make sure you understand all of the consequences of the them before you even consider it. That said, now is as good a time as any to get your hands on a mortgage tracker.
Thomas Baugh offers more wisdom on mortgages at the Mortgage Broker Site.
http://www.mortgagebrokersite.net/mortgages/tracker-mortgages
Source: www.articlesbase.com