Tracker Rate Mortgages

The Interest rates on tracker mortgages follow the bank of England’s base rate so this means that when the base rates go up your monthly payments go up and when the base rates go down your monthly payments go down.
Monthly payments reduce as soon as the base rates goes down so you would benefit quickly, a Tracker Mortgage will also rise if the base rates goes up so you will end up paying more.

What are the benefits of a tracker mortgage?

A tracker mortgage is a variable rate mortgage which always follows the Bank of England’s Base Rate, so your payments will change in accordance with external market interest rates. You will quickly benefit from any potential changes, plus the rate on your tracker mortgage always maintains the same differential between the rate you pay and the interest rate set by the Bank of England.

The rate you pay on your Tracker Mortgage and the interest rate that is set by the Bank of England will always stay the same all the way through the mortgage term. Some Tracker Mortgages offer a cash back option. This is a lump sum that is offered to you which can be used by you however you wish. You could invest it or spend it, it could help you furnish the property maybe.

This type of mortgage is similar to a Standard Variable Rate Mortgage except with a standard variable rate mortgage the interest rate will only change once a year through annual reviews.

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Related glossary terms to UK Mortgages:
Adverse Credit | Credit Checks | Building Reports | CCJ's | Defaults | Arrears | Bad Credit | Buy to Let | APR | Estate Agents | Early Redemption Penalties | Exchange Contracts | Gazumping | Loan To Value | Mortgage Term | Negative Equity | Stamp Duty | Bank of England Base Rate