You are here: Home - Mortgages - First Time Buyer - News -

The last sub-1% tracker mortgage has disappeared

0
Written by: Owain Thomas
13/11/2017
The Bank of England’s Base Rate rise has resulted in all the sub-1% tracker rate mortgages being removed from the market.

The lowest two-year tracker rate available now is 1.24%, while the average rate is 1.97%, according to data firm Moneyfacts.

It also found the average two-year variable tracker rate increased by 0.20% since 1 November.

Moneyfacts finance expert Charlotte Nelson noted that in less than two weeks since the Bank of England’s rate rise the majority of variable tracker providers had already passed on the increase, causing the average two-year variable rate to rise, effectively cancelling out any gains made in the past six months.

“The 0.25% increase to Barclays Mortgage’s 0.99% two-year variable tracker rate marks a significant shift in the market and means it’s the end of the sub-1% tracker era,” she said.

“Unfortunately, with little room to manoeuvre at such low rates, providers have no choice but to pass on the base rate rise to borrowers. The very nature of variable tracker rate mortgages means that as base rate rises, so will the rates on these deals. The quick reactions of providers only illustrates the extent to which the market had been prepared for the rise.”

She added that Standard Variable Rates (SVRs) had been slower to react, but with the average SVR standing at 4.66%, these rates are already significantly higher than those on many other options available to borrowers.

Nelson also highlighted that many lenders had not been so quick to pass on the rate rise to savers, with only 18 providers paying 1% or more on their easy access savings account.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
2364120-clock-watching
Working 9 to 5? Brits prefer 8 to 4, thank you

A majority of Brits would prefer to start and finish work earlier than the standard 9-5, YouGov finds.

Close