More on Mortgages in the UK

If you think that interest rates will continue to go down, at least in the UK, you may be interested in a tracker mortgage. Of course, for the time being, the Bank of England has frozen the level of interest rates, but that could change soon. Due to the credit crunch, there is strong pressure to lower interest rates and to inflate the money supply, in order to get the real estate and mortgage markets somewhat liquid. Whether this classic textbook move will work is another question.

In the United States, a tracker mortgage, I guess, would be the same thing or similar to an ARM, an Adjustable Rate Mortgage. In any event, it is very interesting that these mortgages come in for as low as a 2-year time span. I guess that after the two-years, you have to get another mortgage. How does one decide whether to get a fixed-rate mortgage or a tracker? The bankers say it depends on what your atitude to risk is. Personally, I think it is a lot safer to get a 30-year fixed rate mortgage for the home that you purchase.

After all, you do need to be able to make a long-term household budget. You can not plan your expenses on the necessity for striking it rich or winning the lottery. And another factor is that even if interest rates go down now, who is to say what they will do in the future. That, probably is the reason that some people are attracted to a mortgage that also has a 2-year term. They feel that if interest rates start to go up again, they can readjust their new mortgage accordingly. However, this leaves out one very important risk factor. When money becomes tight, or even tighter than it is now, then it can become virtually impossible, say two years in the future to get a loan at all. That is why I favor the fixed long-term mortgage. Get a Free Mortgages Quote and find out what's right for you.