Third of tracker mortgages pulled after base rate drop
Almost one in three tracker mortgages were withdrawn from the market just days after the Bank of England (BoE) dropped the base rate to a record low of 0.1 per cent.
Today HSBC became the latest lender to withdraw tracker products, with all two-year tracker rates being removed from sale.
According to Moneyfacts data, on 18 March, the day before the most recent cut to 0.1 per cent, there were 243 tracker mortgages available but as of 24 March, there are now 168 – a 31 per cent fall.
The most significant drop was seen among the two-year tracker category, where the number of products available fell from 198 to 132.
Full-term tracker mortgages saw product numbers decline from 38 to 33, while five-year trackers fell from five to one.
The only tracker category not to see a change were three-year offerings with two options still available to borrowers.
The first emergency rate cut to 0.25 per cent on 11 March did not appear to have as much of an impact on lenders.
According to the Moneyfacts data just one tracker mortgage was withdrawn across all categories following the 11 March announcement. This was a two-year tracker mortgage.
The average rate of a tracker mortgage has seen an inevitable drop with a two-year tracker now typically at 1.73 per cent, down from the 1.88 per cent recorded on 20 March.
This is down further from the 2.03 per cent recorded on 10 March, the day before the first emergency base rate cut to 0.25 per cent.
The average rate for a five-year tracker is currently 1.59 per cent, previously 1.83 per cent on 20 March and 2.33 per cent on 10 March.
A term tracker mortgage now has an average rate of 3.07 per cent, down from the 3.26 per cent seen before the base rate was cut to 0.1 per cent. Before this, the average rate was 3.72 per cent.
Three-year trackers maintained the same average rate of 3.14 per cent.