Tracker Mortgages

A tracker mortgage is a type of variable rate mortgage. Here, the interest rate usually tracks the Bank of England base rate at a set margin above or below it, for the period of the deal.

The Rates

In comparison to other types of mortgages, when the interest rates are low, the borrowers monthly repayments might be less. However, this also means that when the interest rates are higher, so are the monthly repayments. Alike with a SVR mortgage, the borrower can never be certain of what their monthly repayment amount will be. Although the interest rate on a tracker mortgage is based to BoE interest rate, the actual interest rate applied on the mortgage will be determined by the lender. This is quite often higher than the base rate. Most tracker mortgages run between one and five years, but some may run until the end of the mortgage term. On completion of the tracker mortgage, most lenders will switch the mortgage to a standard variable rate of interest.

A MORTGAGE IS A LOAN SECURED AGAINST YOUR HOME OR PROPERTY. YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT. YOU MAY HAVE TO PAY AN EARLY REPAYMENT CHARGE TO YOUR EXISTING LENDER IF YOU REMORTGAGE.

The Financial Conduct Authority does not regulate most forms of buy to let mortgage.