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Official figures show homeowners on tracker mortgages are paying too much

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Latest figures report that a record 35 percent of homeowners have taken out a tracker mortgage in the last year. It would seem that this is a particularly good financial move as mortgage repayments track the Bank of England base rate which has been decreasing at an extraordinary rate and is predicted to keep falling.

However the difference between the Bank of England base rate and average tracker rate is currently at its highest recorded level. Previously a lenders charge on a tracker mortgage had been around 0.94 percentage points above the base rate; now on average a homeowner is looking to pay a premium of 2.84 percent. On a typical loan of 150,000 GBP homeowners could be looking to pay up to 2000 GBP on top of their loan repayments .

This provides further evidence that government intentions to help struggling homeowners is not performing as promised. Instead the people who have got the best deals, are those who took out a tracker mortgage a year or two ago when lenders were offering very generous rates.

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