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Abbey reignites tracker market

Abbey has released a new range of competitive tracker mortgages in the wake of the tracker cull last week.

After the Bank of England dropped interest rates to 3 per cent, almost all UK trackers were pulled as the high street banks waited for Libor to follow suit.

But Abbey has this afternoon been the first to return with some 60 per cent and 75 per cent tracker products. All are two-year deals, with the 60 per cent remortgage at 4.89 per cent with £499 fee, the 75 per cent core and remortgage at 4.99 per cent with £995 fee and the 75 per cent homebuyer tracker at 5.04 per cent with £995 fee.

Hamptons managing director Jonathan Cornell says: “This is a good start and I would expect the other big lenders to follow suit.

“Abbey is leading the pack right now, mainly because Nationwide is letting it lead, and HBOS is watching everyone, making sure it is secure before the takeover. But now we have one tracker range out, hopefully others will come this week.

“It’s been frustrating to have no trackers. but the mortgage market is in intensive care and will not be fixed right away.”

Many advisers were worried that trackers in a post-3 per cent world would be similar to those pulled last week, creating the strange scenario where new trackers would have a higher rate than the lenders’ standard variable rates.

Cornell says advisers will be relieved at the move from Abbey. He says: “The higher the margins between the new products and the SVR, the better it is for the adviser and for the customer as the remortgage market can keep going.

“And lenders do not want everyone on the SVR as it means the lender cannot predict who is going to pay what, and when. And knowing that is crucial for the mortgage market to keep going.”

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