TRACKER MORTGAGE

A Tracker mortgage is similar to a Standard Variable Rate (SVR) mortgage, though this type tracks the Bank of England (BoE) base rate, and is usually at a rate attractive to the borrower. 

Tracker mortgages are on offer from relatively few providers. The interest rate is determined by the BoE base rate. If the base rate falls, so does the tracker rate & vice-versa. The rate is usually defined as a fixed percentage (e.g. 0.75% or 1%) above base rate.

Some of the better rates actually match the BoE base rate for the first few years of the loan. This is a big saving over most lenders SVR. The guaranteed rate above base rate may be fixed for a given term or for the lifetime of the mortgage.

Tracker mortgages may or may not contain redemption penalties depending on the lender and the individual deal. Check with your Mortgage Broker for details.