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Tracker Mortgage

Tracker mortgage guide

Tracker mortgages are one type of mortgage available to homeowners. Tracker mortgages along with fixed-rate mortgages are the most popular types of home loans.

In this guide to tracker mortgages we cover:

What is a tracker mortgage?

A tracker mortgage is a variable rate loan  that generally follows the Bank of England base rate moving as it changes up or down.

Generally, tracker mortgages are set higher than the Bank of England base rate but lower than lender standard variable rates. For example, it might be set at 1 percentage point above base rate.  But in the past, when base rates have been high, some tracker mortgages were a fraction of a percentage point below the base rate.

All tracker mortgages are anchored to a prevailing rate. While it's commonly the base rate, it can be linked to the lender's standard variable rate or more rarely other variable indices such as Libor – the rate at which banks lend to each other – or money market rates.  

Tracker mortgage offers

The table shows tracker mortgage offers currently on the market and links to the lenders. To browse other types of mortgages as well, go to our mortgage offers section.

Lender Initial Rate Duration Standard Rate Overall Cost For Comparison Max Loan To Value Fee
  • Santander Direct Trackers

1.95% 2 years 4.24% 4% APR 60% £1,995
  • Chelsea BS 70% LTV

1.99% To Dec 2013 5.79% 5.4% APR 70% £1,495
  • Yorkshire BS

2.29% To Nov 2013 4.99% 4.7% APR 75% £995
  • Skipton BS Remortgage Tracker

2.38% 2 years 4.95% 4.8% APR 60% £995
  • ING Direct

2.44% 2 years 3.5% 3.5% APR 75% £445
  • Market Harborough BS

2.48% 2 years 5.49% 5% APR 75% £845
  • ING Direct

2.55% term 3.5% 2.5% APR 60% £945
  • Nationwide BS Remortgage Trackers

2.69% 3 years 3.99% 3.8% APR 70% £999
  • First Direct Repayment BRT Fee Free

3.19% Term 3.69% 3.2% APR 75% Nil
  • Woolwich (Barclays) Tracker

3.19% Term 3.89% 2.6% APR 70% £999

How does a tracker mortgage work?

A tracker mortgage is directly linked to an interest rate, usually the Bank of England base rate, and will move in line with any changes to the rate.  For example, your rate may be set at 1% above base rate, so if the base rate is 1% the interest on your mortgage will be 2%.  In the vast majority of cases you will be charged the anchor rate plus a certain amount, but occasionally lenders offer tracker mortgages which are minus the linked rate.

Normally, tracker mortgages like fixed-rate mortgages run for a set period of time but you can also get lifetime trackers, which follow the rate until your mortgage is paid off or you remortgage to another deal.

Where does the tracker aspect come in?

Tracker mortgages are so called because they are anchored to a rate, and 'track' changes usually in the base rate. Therefore, if base rate climbs by 1%, the interest rate you pay also increases by 1%. Similarly, if they fall, your mortgage repayments will be reduced.

When does the Bank of England change interest rates?

If your tracker mortgage is anchored to Bank of England base rate, your interest rate is under review every month. The Monetary Policy Committee (MPC) studies the rate of inflation and weighs up other economic factors every month to decide 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 .

Tracker mortgage enquiry

Make a FREE tracker mortgage enquiry below.

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