The percentage of borrowers opting for tracker mortgages has increased from 5% in December to 10% in January 2006, the highest for over a year.
Peter Gladdy, director of Mortgages Direct commented: “Despite the Bank of England’s decision to freeze interest rates for the time being, the substantial increase in the percentage of borrowers opting for tracker mortgages and variable mortgages over the past month hints that consumer confidence has switched. There is a growing belief that the Bank of England will decide to lower the interest rates in the imminent future.”
Overspending during the festive period – sub prime mortgages on the up
Mortgages Direct survey also reveals that there is increase in borrowers opting for sub prime mortgages in the aftermath of Christmas as homeowners opt to consolidate their debts, after overspending during the festive break. The percentage of borrowers opting for sub prime mortgages increased from 11% in December to 21% in January.
Peter Gladdy commented: “This is a very common trend post Christmas and should not be anything to worry about, however if this trend continues for the next few months it could indicate that borrowers are struggling with their finances and are borrowing too much. A quarter percent decrease in interest rates would be a very welcome respite for many homeowners.”
