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Tracker Mortgage

A guide to tracker mortgages

Tracker mortgages, also called rate tracker mortgages, are an alternative to fixed-rate mortgages, and work in a slightly different way.

A tracker mortgage is anchored to a prevailing rate, usually the Bank of England Base Rate, and is set to cost a percentage, or fraction of a percentage, more than this rate.

How does a tracker mortgage work?

A tracker mortgage loan is directly linked to an interest rate, and for a specified period it will cost a set percentage amount higher than this rate. For instance, if the tracker mortgage is anchored to the base rate at 1 per cent above, and the base rate is set to 5 per cent, the rate you have to pay will be 6 per cent.

Where does the tracker aspect come in?

Tracker mortgages are so called because they are anchored to the rate, and 'track' changes in base rate. Therefore, if base rate climbs by 1 per cent, the pay rate also increases by 1 per cent. Similarly, in a climate of falling interest rates, borrowers can enjoy reduced mortgage repayments.

When does the Bank of England change interest rates?

If your tracker mortgage is anchored to Bank of England base rate, you will experience a revision or maintenance of interest rates once every month. The monetary policy committee studies rates of inflation and weighs up a number of economic factors to decide on whether to increase, decrease or maintain interest rates.

What type of tracker mortgages are available?

A number of different rate tracker mortgages are on the UK market, including two-year tracker mortgages, five-year tracker mortgages, ten-year tracker mortgages and mortgages that track a rate for the life of your loan. The application fees, product and valuation fees, and flexibility of the loan will depend on the lender and your circumstances.

How do I find a tracker mortgage?

For more information about tracker mortgage loans and to get a tracker mortgage loan quote, please use our Mortgage Enquiry Form and one of our experts will contact you for further assistance. Alternatively, you can give us a call on .

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