Banks seeking to end tracker mortgages

BANKS have been accused of trying to convince struggling homeowners to let go of cost-effective tracker mortgages when they seek help with their repayments.

Mortgage brokers said they are finding that mortgage-holders who want to extend the interest-only agreement on their tracker loans are likely to find that the bank will look to move them on to a standard variable rate (SVR) and off the tracker.

Tracker mortgages track the interest rate set by the European Central Bank (ECB) and became very popular when the ECB began slashing rates. However, they were soon withdrawn from the market as they became too expensive for banks.