Tracker Mortgage

Tracker mortgages are directly linked to the Bank of England’s base rate and follow this absolutely for the period of the mortgage.  There are varying degrees of tracker; the increment that tracks the base rate is specified by the lender and runs for the incentive period. 

Tracker mortgages generally offer some of the cheapest rates in the market.  This type of mortgage is great for people who can take advantage of this but can afford to pay more should the interest rates rise.

Lifetime Tracker
As it’s name suggests, this type tracks the base rate for the lifetime of the loan.

Discounted Tracker
The other kind of Tracker is one that tracks the base rate for a set period of time, agreed at the start of the Mortgage.

Pros of a Tracker Mortgage;

• competitive deals
• it allows you to benefit if the Bank of England base rate falls.  If the base rate drops, your mortgage payments will drop also

Cons of a Tracker Mortgage;

• there's always a risk that if the Bank of England base rate increases, your mortgage payments will also increase

Know the Facts
As always, it’s important to be aware of the terms and conditions when you sign up to a Tracker Mortgage.  Each deal is unique so make sure that you are aware of any special conditions that may apply, for example, an early repayment charge. 

Full details are shown in the Key Facts document relating to your Mortgage.  Ask your Financial Advisor to talk you though this if you are unsure - they can’t tell you what will happen to the interest rates but they can tell you what your mortgage means for you.