While confronted with the dilemma in choosing a mortgage, the home owners always find themselves in the shoes of Othello – “To be or Not to be – that is the question!” in selecting the interest rates. Fixed Rate Mortgage, Tracker or Discount Mortgage – which one I should select? This is the primary question that nags the minds of borrowers.

The experts are the best persons to recommend the choice of mortgage that is best suitable for you, after assessing your financial background. However, a little knowledge about the kind of choices available to you would always be beneficial in your long-term interests.

Trackers are attractive by means of their fluctuations in the amounts, based upon the financial markets that swing both ways. When the authorities announce an interest rate cut, the home owners who opted for Trackers are certain to get benefited. Equally so, they are the first ones to suffer, when the Base Rate rises. This sort of uncertainty prevails in the case of Tracker Mortgages, and those who are ready to risk these uncertainties can readily select Trackers.

As regards Discount Mortgages, it depends on the lender’s reaction to give effect to the rate cuts as and when they are announced. Generally a discount is entitled on the SVR – Standard Variable Rate – adopted by the lenders. But in practice, it is the other way round, where lenders pretend as if they are from an alien planet and never heard about the rate cut.

According to latest survey by a popular financial institution, more than half of the home owners in UK, i.e. 57 percent, responded in favour of Fixed Rate Mortgages, while only 23 percent cast their votes for Trackers. The background of this overwhelming response for Fixed Rate Mortgages is attributable, according to experts, to the economic climate prevailing and the efforts of the Bank of England to control inflation. The home owners feel secure by opting for Fixed Rate Mortgages, which enable them to know before hand what their monthly repayment amount will be and to plan their budget accordingly.