Borrowers struggling to find a cheap fixed rate deal are turning to tracker mortgages as speculation mounts that the Bank of England will cut interest rates.

Mortgage lender GMAC-RFC believes that in the current economic environment it makes financial sense to switch to a mortgage which tracks the bank’s base rate.

GMAC-RFC believes more people will turn to tracker mortgages next year, particularly buy-to-let investors looking to meet rental demands.

The Council of Mortgage Lenders (CML) is warning that as many as 1.4m homeowners could face increases in their mortgage repayments of up to 60% when their current fixed rate deals, which they acquired when rates were much lower, expire.