The cost of tracker mortgages falls again
The average two-year tracker rate has fallen for the third consecutive month to reach 1.92%, according to Moneyfacts.
The financial information provider said that this is the lowest trackers have been since the base rate rise back in November 2017, when the average was 1.77%.
By March this year it had risen to 2% but has since fallen by 0.88% to 1.92%.
Charlotte Nelson, finance expert at Moneyfacts, said: “This is the third consecutive monthly reduction and is the lowest average two-year tracker rate since the base rate rise in November 2017.
“Previously, providers were opting to almost ignore the tracker sector of the mortgage market with rates and product numbers starting to stagnate. However, since competition in the fixed rate market has reached new heights, providers have started considering the variable rate sector as a new avenue in which to attract borrowers.”
Small but growing
Moneyfacts noted that the two-year variable tracker market is significantly smaller than its fixed counterpart, so any change, particularly with some of the best deals, can have a swift impact on the average rate.
However, it found that, not only has the average rate reduced, the number of two-year tracker deals on the market has increased, rising from 222 at the start of the year to 246 deals in June.
“Despite this small resurgence, demand for such deals is likely to be relatively low, particularly with a base rate rise looming on the horizon,” admitted Nelson. “However, the average two-year tracker rate is still considerably lower than the average two-year fixed rate, which stands at 2.52% this month.”