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Trackers will grow in popularity, website predicts

Tracker mortgages are becoming a more attractive option due to analysts' predictions of falling interest rates, financial website moneysupermarket.com said yesterday.

The comments follow an apparent recent surge in the popularity of the home loans, which are designed to closely follow rate rises and falls.

Figures from the Council of Mortgage Lenders for December 2007 show that 29,600 tracker loans were taken out over the course of the month - 24 per cent of all home loans.

Louise Cuming, head of mortgages at moneysupermarket.com, said: "Although it's only 24 per cent, that's the highest it's been since back in 2005 - which shows that, for those who aren't too worried about affordability, the trends appears to be [to expect] rates to go down."

Interest rates have been cut by the Bank of England twice in the past four months due to fears of an economic slowdown in the rate of the credit crunch.

A generally gloomy economic outlook is also likely to lead to further reductions in the future.

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