Tracker Mortgages

Base Rate Tracker Mortgage

The name might be a bit esoteric, but a base-rate tracker is actually just a mortgage with an interest rate that tracks the Bank of England’s base lending rate.

These deals can last for a few years, reverting to the lender’s standard variable rate after that.

Or they can be for the whole mortgage term known as a lifetime tracker.

For instance, you might find a mortgage deal with the interest rate set at base rate plus 0.25 per cent for two years, or base plus 0.75 per cent for life.

Most lenders set their standard variable rate at about 2 per cent over base, so effectively this is a type of discount deal.

Every time the Bank changes its base rate, your interest rate will change by exactly the same amount.

Just like with any other variable rate discount deal, a base-rate tracker will suit some people better than others.

To help you decide if this is the right type of mortgage for you, read Who should choose a tracker?

and also read When is a good time to choose a tracker?