Flexible Tracker Mortgage Quotes

Tracker Interest Rates

The tracker mortgage differs from the Standard Variable Rate (STV) in that the interest rate is directly tied to the Bank of England base rate, and does not follow the lender’s rate, which would always be higher. The incentive, particularly to the first time buyer, is that the margin is set to a maximum of only 1% or 2% above the Bank of England base rate. And in some extraordinary cases it may even be set below the rate. This means that repayments during the life of the tracker offer, (usually from 2 to 5 years), are invariably cheaper than with other standard mortgages.

A greater advantage is that with an (STV) not all lenders will pass on any advantageous changes, which may occur in the base rate. The tracker, however, must always follow the base rate, and any changes will be automatically triggered and the repayments adjusted accordingly. Although most tracker mortgages are set for a very short period, there are some exceptional tracker deals, which continue to be fixed to the base rate throughout the life of the mortgage.

But even here, there is always a possibility of the Bank of England base rate rising exceptionally, and in these circumstances the borrower would not be protected against spiralling costs.

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