Tracker deals go out the window after the Bank of England slashes rates

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The Independent Online

Tracker mortgages have failed to make a reappearance after the latest Bank of England base rate cut, forcing homeowners into more expensive deals. Following the Bank's reduction, by one percentage point, just 45 tracker-rate products are now available, and the average rate on these has only come down by 0.85 per cent.

Darren Cook of financial analyst Moneyfacts said: "As happened after November's base rate cut, new tracker deals quickly disappeared from view. But this time they have failed to return to the market, with speculation mounting that mortgage providers have strong expectations that the base rate will be cut again. I would be surprised if we see many more announcements, and if a further base rate cut materialises in the new year, I foresee even less impact on new mortgage borrowing."

The difference between the average two-year tracker and the base rate is now 2.31 per cent, up from 1.67 per cent in November.

Ten days on from the Bank's latest cut, only one in 10 mortgage providers has reduced their standard variable rate by the full amount. Eleven have cut by less than 1 per cent, and 76 have yet to announce their intentions.

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