Tracker Mortgage
Falls when the base rate falls
Increases when the base rate increases
overpay on your mortgage when rates are lowered…
Tracker Mortgage
A tracker mortgage is a variable-rate mortgage that tracks the Bank of England base rate as it moves up and down. The result is that as and when the base rate changes, so will the rate applicable to your mortgage.
An example would be: if the base rate was at 0.5% and a tracker mortgage charging base rate was plus 1.5%, means overall you’d be paying 2%. So if the base rate were to then rise to 1%, means your rate would then increase to 2.5%.
As with fixed-rate mortgages, trackers are available over different terms: most commonly two or five years, and if you wanted to pay off the mortgage during that time, penalties may/could/would be incurred.
In some instances, you may also be able to take out a lifetime, or term, tracker mortgage tracking the base rate for the entire mortgage term. Generally, these would not involve penalties, and although a good option if not wanting to be tied in, these deals are not always or readily available.
Questions about Tracker Mortgages?
Here are some commonly asked tracker questions
Are tracker mortgages better?
Hard to say as everyone’s situation and circumstance differ, but an advantage of a tracker mortgage is when the external rate is low. The Bank of England base rate has been below 1% for over 10 years. It might be easier to overpay on your mortgage, resulting in your mortgage being paid off more quickly, with less overall interest having been applied.
Could I overpay on my tracker mortgage?
Most tracker rate mortgages will let you make overpayments without charging an early repayment charge – usually, you’re allowed to overpay up to 10% of the outstanding mortgage balance per year.
THINGS TO NOTE
If you wish to speak with someone about mortgages and/or the products currently on offer. You can request a callback by providing a few details for a no-obligation conversation.
This would be normally done during 24-hours of submission during normal working hours.
Please note that in doing so the details you provide will/may be shared with our mortgage broker partners, to purely be able to provide you with better informed, and more personalised information.