Homeowners 'in a dilemma over mortgages'

Homeowners are becoming increasingly confused over which mortgage product to choose when it comes to remortgaging, it has been claimed.

According to research from Abbey, the ongoing credit crunch is leaving many people in a quandary over which mortgage to choose.

Many lenders have been adjusting their fixed and tracker-rate mortgages, meaning that almost two-thirds of people who own a home in the UK would find it difficult to choose which mortgage to go for if they were put on the spot, the bank's report said.

Despite the recent base interest rate cut to 5.25 per cent, many people are still unsure about whether the market will fluctuate, Nici Audhlam-Gardiner, head of Abbey mortgages, said.

"Depending on who you talk to there are different outlooks for the UK economy and for Bank of England base rates.

"While most economists agree they will go down, there is debate about how much they will fall and when. This uncertainty leaves homeowners with a bit of a dilemma on their hands - what is the best mortgage to go for?"

At the beginning of February, the bank asked consumers which mortgage they would go for if they had to change tomorrow, with the result of four times as many people saying that they would opt for a fixed-rate mortgage.