Report shows rising interest in tracker mortgages

October 12, 2024 by Brendan O'Neill

Mortgage Advisors

There has been a sharp spike in the level of consumer interest in tracker mortgages during the last three years, according to a new report that has been published by the Financial Conduct Authority.

This FCA report shows that interest in that type of loan has risen by 67% since 2021. The data used for the report was put together by financial advice company Quilter and it clearly indicates the scale of the increased interest. In 2021, there were 118,818 tracker mortgage completions in the UK. By the opening quarter of this year, the figure had risen to 198,044.

Beyond that though, what the data also shows is that it is a particular kind of tracker loan that people are opting for. The highest level of consumer interest has been in ones that come with two-year incentivised rates. Completions for these loans have gone up by 87% between 2021 and 2024.

It suggests that customers want incentives during the short-term rather than over a longer period. This is likely because they feel that interest rates will settle or even start to come down fairly soon. Most observers think rising enthusiasm for tracker mortgages is due to the instability of the economy and interest rates in recent times.

Charlotte Nixon from Quilter has said these loans offer greater flexibility than fixed-term ones, but can leave some people worried about base rate changes.

Whether a tracker mortgage offers the best option for an individual is something that an advisor with the CeMAP qualification can discuss with them.