Tracker mortgages on the up

Two of Britain's biggest lenders have raised the rates on their tracker mortgages for new borrowers by more than half of one per cent today.

Halifax and Nationwide made the moves today amid speculation that there will be another interest rate cut next month.

Earlier today, Nationwide's own chief economist Fionnuala Earley predicted that the Bank of England's monetary policy committee (MPC) will lower its base rate when it meets next month, a view that may have prompted the move.

In this context the measures may be seen as pre-emptive, limiting the reduction in profit made by banks if and when the rates are cut.

As well as this, it would mean that borrowers who stand to benefit from reductions on a tracker mortgage which each MPC reduction would need to see at least three to be better off than someone who had taken out the same product before the new rates were applied today.

With the benefits of having a tracker mortgage diminished, some house-hunters may decide to consider the self build option to save money.


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