First Time Home Buyer News: Trackers Offer 'Cheapest Deals'

07-Jul-2006

The Bank of England has once again voted to keep interest rates stable and according to experts, tracker and discount mortgages offer the cheapest deals for first time buyers.

Ray Boulger of independent mortgage adviser, John Charcol, said: "Fixed rate mortgages now look expensive unless [the] base rate rises above five per cent.

"However, there will always be a large market for fixes due to many people wanting the security of knowing exactly what they are paying out each month."

Mr Boulger warned that aspiring homeowners taking out a tracker mortgage should be able to withstand interest rate rises of around one per cent.

"An ideal combination is a tracker or discount with a droplock facility, allowing the borrower to switch to any of their lender's fixes at any time if and when they consider the fix offers better value," he added.

Meanwhile, Alliance and Leicester advised first time buyers on tight budgets to look out for competitive two-year fixed-rate mortgages.

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