With the cost of borrowing expected to fall to 1 per cent or below next year, it is no surprise that tracker mortgages, which are pegged to the Bank of England's base rate, have never been more popular.

But last week lenders dismayed homeowners by withdrawing almost all tracker deals after the base rate was cut by 1.5 percentage points. Better news emerged this week, however, as some lenders made a cautious return to the market. Here we answer your questions on another tumultuous week for borrowers.

Who has relaunched tracker mortgage deals?

Four banks have unveiled new products pegged to the lower base rate. Halifax, the UK's biggest lender, has released a number of trackers, including a two-year deal with a rate of 5.14 per cent, 2.14 points above base. Abbey, owned by Santander, has also introduced two trackers. The first, for borrowers with a 40 per cent deposit, has a rate of 4.89 per cent, or 1.89 points above base. Homeowners who need to borrow up to 75 per cent of a property's value are offered a rate of 4.99 per cent, with a fee of £995.

Lloyds TSB and its mortgage brand, Cheltenham & Gloucester, announced new rates a day after Abbey, undercutting its rival with a number of two-year and full-term deals. Its lowest rate is 4.79 per cent, or 1.79 per cent above base, for borrowers with a 25 per cent deposit. This deal comes with a £1,995 fee and the maximum loan is £250,000.

Alliance & Leicester offered a two-year tracker at 4.89 per cent, or 1.89 points above base, and a large fee of 1 per cent. Customers require a 40 per cent deposit.

Are the new deals good news for borrowers?

The rate that new customers pay might have fallen slightly, but the loans are more expensive relative to the base rate. For example, in October Halifax was offering a two-year tracker at 6.04 per cent, or 1.04 per cent above base. This week the best Halifax deal was 5.14 per cent, or 2.14 per cent above base.

Why are margins increasing?

Banks argue that the cost of funding new mortgage lending on the wholesale market has not fallen as sharply as the base rate, preventing them from passing on the full benefit to borrowers. However, mortgage brokers also point out that banks are keen to increase profits as their balance sheets have taken a battering during the financial crisis.

In recent years banks have had to compete fiercely for new mortgage business, pushing down rates. But with the supply of funding still limited, lenders have less need to compete with each other to attract new business, so are taking the opportunity to restore profits. There are fewer than 3,000 mortgages on the market today, compared with 15,000 a year ago.

Should I still opt for a tracker?

Even with inflated margins, borrowers who pick up a tracker today could enjoy even better rates over the next year as the Bank of England cuts the base rate to try to boost the flagging economy. However, it is important to remember that trackers from a number of lenders, including Halifax, have “collars”, which give the lender freedom not to pass on reductions once the base rate has fallen to a certain point. Halifax's collar is at 3 per cent. Nationwide, which is expected to introduce new trackers next week, has a collar of 2.75 per cent.

The best-buy tracker is from HSBC, pegged 0.99 points above base for two years. However, this deal is available only to borrowers with a deposit of at least 40 per cent.

What about fixed-rate deals?

Yesterday Barclays introduced a new one-year fix at 3.99 per cent for borrowers with a 40 per cent deposit. However, fixed rates could fall farther. Experts suggest that it may be worth staying on a lender's standard variable rate (SVR) until fixes fall - provided that your lender has cut its SVR. Barclays, HSBC and Alliance & Leicester are the only big lenders not to have passed on the base-rate cut to borrowers on variable rates.