Tracker mortgages were top of the agenda in the weekend money pages and the overall conclusion was that they don’t live up to their name. The Financial Times reported that in spite of predictions from analysts that the Bank of England could reduce the base rate from 4.5per cent to as low as 3 per cent or 2.5 per cent, banks are not expected to reflect the decrease in significantly lower mortgage rates before the end of the year. The Observer noted that some mortgage lenders have almost doubled some of the margins on their tracker rates in the past week, while others have pulled out of the market altogether. Experts in the Mail on Sunday warned those looking to remortgage to act fast as deals are being repriced higher almost every day, but borrowers need to be careful which tracker deal they choose, as some mortgages have limits on how low a pay rate can fall- known in the industry as a ‘collar’. Elsewhere, the Times revealed that there are growing fears that negative equity could eventually exceed the levels seen in the early 1990s. Standard & Poor’s, the ratings agency, estimates that two million homeowners could owe more in mortgage debt than the value of their property by 2010 and that tumbling house prices are pushing more than 60,000 homeowners into negative equity every month. Finally, the Sunday Express reported that many first time buyers previously priced out of the market are now considering a purchase, as house prices fall and mortgage rates are expected to come down. Experts urged first-time buyers to look beyond house prices and make sure they are buying the right place for the right reason.
What the papers say - 25th and 26th October 2008