Tracker mortgage

Typically the tracker mortgage rate will be set as a percentage above the base rate and although the resulting interest rate is usually lower than a mortgage lender's standard variable rate, this will vary from lender to lender. With a base rate tracker mortgage the rate of interest you pay is tied to the base rate set by the Bank of England.

The main advantage of a tracker mortgage is that the difference between the variable rate and the base rate is usually a lot smaller than the margin between a standard variable rate mortgage and the bank base rate, so you will end up paying less overall.

In addition, if the base rate falls, the interest payments on your mortgage loan will fall accordingly, no matter how low the base rate goes. However, remember that the base rate can rise as well as fall, which can make budget planning difficult.

Need more help or advice?
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