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Mortgages Expert Guide

Tracker Mortgage

A tracker mortgage often known as a base rate tracker mortgage, is linked to the Bank of England base rate rather than linked to the mortgage companies standard variable rate. The Bank of England base rate is reviewed each month and therefore a tracker mortgage gives the borrower the certainty of knowing that their payments will rise and fall with any changes. A base rate tracker mortgage is usually charged at base rate plus a set value ie.

Bank of England Rate is 5.75% you Tracker Mortgage is Base Rate +1% therefore you will be paying 6.75%

There are variables to tracker mortgages in that like a discounted mortgage where you can get a set discount for a period of time off of a variable rate mortgage you can get a discount for a set period off of a base rate tracker mortgage.

Tracker Rate Mortgage Pros

  • If the Bank of England rate falls so does the cost of your mortgage
  • A base rate tracker deal moves your rate in line with those of the Bank of England Base Rate, unlike discounted deals and standard rates where it often depends upon the rates of the lender
  • You can usually change your mortgage without any early repayment charges ( Unless you have a discounted tracker) ideal if you believe rates are going to continue rising
  • As they are simple products for lenders to design they usually come with lower fees than other mortgage schemes

Tracker Rate Mortgage Cons

  • As they track the Bank of England Rate the cost of your mortgage may go up and there is no maximum
  • Standard tracker mortgages are generally more expensive than other options available.

Best Tracker Mortgage Rate Table

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