Tracker rates

You may have been asked in the past to track something or someone?   A tracker rate mortgage does exactly the same. The rate will track an indices, normally the Bank of  England base rate (BBR) (0.5% as at 15th May 2013). A lender will offer you a certain percentage plus BBR. For example 3% + BBR for 3 years. This means your rate will be 3% +0.5% = 3.5%.

Similar to fixed rates the term of the product can last from 1 year up to in some cases the lifetime of the mortgage. More commonly the product will be for 2, 3 or 5 years.

Benefits of tracker rate:

  • Your monthly payments will reduce when BBR goes down.
  • Any future increase is dependent on the Bank of England increasing base rate.
  • You are not at the mercy of the lender if they want to increase your rate.
  • Tends to be a cheaper option than a fixed rate

Negatives of a tracker rate:

  • Your monthly payments will fluctuate dependent on BBR
  • Their is no upper limit on what your monthly payments could be.
  • A lender will normally charge a product or booking fee
  • You will be subject to a early redemption fee if you wish to pay the mortgage in full during the period of the tracker rate.

A tracker rate is suitable for those who can cope with fluctuating monthly payments. It is suitable if you want the cheapest monthly payments.

Your home may be repossessed if you do not keep up repayments on your mortgage

For more information or you wish to discuss further please contact on:

Telephone Number: 01708 64085


Twitter: @LifestyleFinMan

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