Some are even higher than they were before the historic 1.5% Bank of England base rate cut, according to brokers.
Abbey, for example, is offering a two-year tracker deal for those with a 25% deposit, at 1.99% above base rate.
Experts are suggesting that borrowers hopeful of further cuts in the base rate should not opt for a tracker mortgage without first reading the small print as some deals include a 'collar' or 'floor' which allows the lender to cut off from the base rate. If the Bank rate falls to a set threshold, currently 2.75% to 3%, future cuts will not be passed on to customers.
But if confidence is to return to the UK housing market lenders need to more closely reflect base rates, according to on-line brokers mform.co.uk.
'The return of tracker products to the market is welcome news and shows that the Bank of England shock rate cut is starting to work. But we are still a long way from normality in the mortgage market which increasingly looks divorced from reality. In the past a tracker mortgage meant you'd pay base rate or a rate close to it. Now lenders charge a premium for what has traditionally been a popular product,' said Francis Ghiloni, mform.co.uk Marketing and Business Development Director.
'For confidence to return to the market lenders have got to more closely reflect the Bank of England base rate. Otherwise it looks like they are improving their margins and not helping customers,' he added.
Over the past year major lenders have steadily been increasing the rate they charge new borrowers above base rate. In October 2007, lenders were charging base rate plus an additional 0.306% meaning that the average rate came to 6.056%.
By March 2008 when the base rate had been cut by 0.5% per cent to 5.25% average rates dropped slightly to 5.950%, but the charge above base rate increased to 0.598%.
