Buy a tracker with a capper

Money news by Lorna Bourke
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Tracker mortgages are flavour of the month for homebuyers, and those coming off higher fixed rates are casting around for a good deal.

New trackers are more expensive than those issued at below bank base rate (BBR) a year ago and come in at about two to three per cent above BBR With BBR at only 0.5 per cent, this is still a very good rate at about 2.5 to 3.5 per cent. But what happens when interest rates go up?

Some new trackers offer a “cap” – a guarantee that whatever bank base rate does, the interest charge won’t go above a certain level. So borrowers can sign up for these long-term tracker deals, knowing that they will not get caught out.
Woolwich has just brought out a lifetime tracker at 2.99 per cent above BBR, giving a pay rate of 3.49 per cent. It is capped at 5.99 per cent, guaranteeing that whatever BBR does, borrowers will not pay more.

The Woolwich Lifetime Tracker has a £995 application fee and loans of up to 60 per cent of the value of the property are available. There is an early repayment charge of two per cent of the balance repaid – but only until April 2012. After that, you can move without penalty if a better deal comes along. For more information, visit

Insider trading

Developers are open to bigger and better offers at certain times of the year. They usually want to boost their sales figures at the end of their financial year and will be flexible on price to win a deal. Get your offers in about a month before the end of that period. You can find out when a company’s year ends on its website.

Tenant power

Because there is an oversupply of rental property, according to the Royal Institute of Chartered Surveyors, tenants are forcing down rents by negotiating hard. Sellers unable to sell, who have had to rent out, are leaving tenants in a strong position when it comes to renegotiating their rent.

If you are a tried and tested tenant with a good payment history your landlord will want you to stay, so offer less and promise to be good. Drops in rent are the sharpest
since 1998.

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