Trackers making a comeback, says Moneysupermarket.com

23 July 2008

Natalie Holt

The gap between the average two-year fixed rate and the average two-year tracker has widened to over 0.5%, data from Moneysupermarket.com reveals.

The weekly credit crunch monitor from the price comparison site shows that the average tracker rate is 5.9%, while the average fixed rate stands at 6.45%.

Moneysupermarket.com says this is the lowest rate trackers have been set at since March this year.

Louise Cuming, head of mortgages at Moneysupermarket.com, says: “In the current environment of uncertainty, it's natural to look to fixed rate deals to provide security but our data clearly shows that it's imperative to look at the whole product range when looking for a new deal.

“This is especially so if you can stomach a little leeway on payments. Trackers have been avoided like the plague in recent months due to interest rates looking unstable, yet all the signs are that rates will be kept on hold for the time being, with the next movement potentially being a reduction.”

She adds: “Some are even predicting rates will go as low as 4% by the end of the year to kickstart the economy, in which case trackers could be a lifeline.”