A tracker mortgage could help save £4,429

A borrower who bought the average home with a 25% deposit and a 25-year mortgage would have saved £4,429 over the last 20 years if they repeatedly took out two-year trackers instead of two-year fixed deals, according to broker L&C Mortgages. The total cost of the mortgage on a £119,938 home – the average price in 2003 – would have been £113,658, compared with £109,224, research firm Defaqto found. Experts said borrowers were effectively charged more for the certainty of having a fixed rate. The average two-year fixed rate for a new mortgage with a 25pc deposit was 4.55% at the beginning of 2003, while the average two-year tracker rate was 4.18%. Tracker rates for those remortgaging were cheaper at the beginning of every subsequent year apart from 2007. 

The Daily Telegraph (27/02/2023)