Tracker Mortgages

Put simply, a tracker mortgage is one of the many different mortgage types that are available on the market today. What separates a tracker mortgage from all of the other kinds of mortgage out there is that a tracker mortgage generally tends to follow the Bank of England base interest rate; it is essentially a variable rate loan in which the rates will change according to the level of interest rates set by the Bank of England.

Sometimes, however, a tracker mortgage might have its rates set slightly above the Bank of England base interest rate, but still lower than lender standard variable rates. The tracker mortgage is set to a prevailing rate, which just usually happens to be the Bank of England base rate, but is set to cost just a small fraction or percentage more than this rate.

So, basically, a tracker mortgage is linked to a particular interest rate and for a while it will cost just a tiny amount more than whatever rate it happens to be tied to. So, for example, if the tracker mortgage is set to 0.5% or 1% above, and the base rate is 3%, then you will end up paying 3.5% or 4%. Armed with knowledge such as this, you’ll be tracking down the best tracker mortgage in no time at all.