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  • Writer's pictureCharlotte Oakley

Tracker rate mortgage

Updated: Dec 20, 2023

A tracker mortgage is a type of home loan where the interest rate is set to a certain percentage above the Bank of England's base rate, or another specified interest rate index. The interest rate on a tracker mortgage changes in line with any changes made to the base rate or index, meaning that your mortgage payments will increase or decrease depending on the movements of the index.


For example, if you have a tracker mortgage set at 1% above the Bank of England's base rate, and the base rate is currently at 0.5%, your interest rate would be 1.5%. If the base rate then increased to 1%, your interest rate would also increase to 2%.


Tracker mortgages typically have an initial period, such as two or three years, during which the interest rate is fixed at a certain percentage above the base rate. After the initial period, you will be placed on the standard variable rate, unless you have a lifetime tracker or opt into a new tracker rate or fixed term mortgage.



Is it right for me?


Choosing a mortgage is entirely dependent on your individual circumstances and personal financial goals but our advisors at Your Mortgage Room will be able to guide you through this process to choose the best option for you.


If you believe that interest rates will remain low and you're comfortable with the potential for your payments to increase in the future, a tracker mortgage could be a good choice for you. However, if you prefer the stability of a fixed-rate mortgage or are concerned about the potential for higher payments, you may want to consider other mortgage options.


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

There may be a fee for mortgage advice. The precise amount will depend upon your circumstances but will be agreed with you before proceeding.

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