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Deciding whether to pick a fixed rate mortgage or gamble on a tracker mortgage is a struggle most homeowners have had to battle with. The outcome of which is either a fixed, potentially more expensive, rate for playing it safe, or an uncertain, and potentially fluctuating, rate that could end up charging more than the standard fixed rate.

Although tracker mortgages have risen in price within the past two years, they have still remained, at an average, cheaper than both two-year and five-year fixed rate mortgage deals. On average, tracker mortgages are at a current 2.3% in comparison to both the two-year fixed rate 2.52% and the five-year fixed rate 2.94%. However, when looking at which type of mortgage rate to get it is important to look at specifics, as with the number of fixed-rate mortgages being significantly larger than those of tracker rates, averages do not always display the full picture. 

Studies into the lowest rate deals available for home-movers, people who want to remortgage and first-time buyers showed that, like the averages mentioned previously, the lowest tracker rate was marginally cheaper than the lowest fixed rate for two-year mortgage deals. However, this difference was extremely minor, with a base rate increase as minimal as 0.25% having the ability to make the tracker rate more expensive. 

Results from the same study also showed that for those wanting a five-year deal, the lowest tracker rate for this was significantly higher than the lowest fixed rate mortgage deal. Therefore, what these studies show is that when looking for the type of mortgage deal to go for, homeowners should research as thoroughly as possible to ensure the best deals possible for the rates that best suit their financial situation, and not to be swayed by sweeping averages that can often be misconstrued as absolutes. 

Recently, lenders have reduced mortgage rates to instill confidence into consumers for the start of 2019. Another extremely important factor to consider is the upcoming arrival of Brexit. With this Brexit cloud looming in the foreseeable distance, the decision on what type of mortgage deal to go for has become drastically more complicated. The uncertainty Brexit has now cast over the future economy of the UK means no guarantees can be made as to the patterns of tracker rates, increasing the uncertainties surrounding these types of deals and further complicating the debate of what type of rate to go for. 

Elsewhere, in the market for second charge mortgages and bridging finance, a survey carried out by Bridging Trends showed that property refurbishments were up from 23% to 28% in 2018 – perhaps indicating the desire of businesses and homeowners to stay and fix up properties rather sell. Those looking for bridging finance will also be pleased to know that the average interest rates for customers reduced from 0.85% to 0.81%, based on the survey which included MT Finance, Ennes Global and Y3S Bridging.



Should you get a tracker mortgage in 2019?
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