Interest in tracker mortgages falls by more than a quarter

Every month our Credit Barometer tells us what you’ve been searching for when it comes to credit cards, loans and mortgages.

In August, you decided to get smart about your mortgage deal.

Which mortgage?

The Base Rate increased from 0.5% to 0.75% in August – the highest it’s been since March 2009. This means some people will be paying more interest on their mortgage if they’re on a tracker or standard variable rate (SVR) deal.

These types of mortgages are now more expensive, because their interest rate goes up and down in line with the base rate.

For example, the latest rise will add around £400 a year in mortgage payments to people on those types of deals, who took out a £250,000 mortgage over 20-years1.

It seems the rise has put people off considering tracker deals. Our research shows just 10% of mortgage shoppers were looking at trackers, down from 38% in the previous month.

Meanwhile 38% of potential customers were searching for fixed-term mortgages – where the interest you pay isn’t affected by the base rate.

Holidays

Our research also shows Brits are looking to borrow more than £4,000 to get away for the summer! Holiday loan hunters wanted to borrow £4,305 on average during May, June and July.

1Experian Credit Barometer, August 2018