Trackers

A tracker is a mortgage rate which tracks the base rate. This means that the lender will charge customers a certain percentage plus the current base rate. This can be an incredibly good deal, but it all depends on how much the lenders charge is.

Variable mortgage rates are always above the base rate because the lender wants to make a profit. This means that the amount they charge over the base rate is what they are taking to cover their expenses and make a profit. So it is important to take a look at this figure. Some trackers cost a small amount of money but theirs are more expensive and so it is important to choose the right one.

The disadvantages of trackers are that the rate can change a lot. This means that if interest rates keep going up and therefore the rate goes up, you will have to keep paying more money. This could be difficult to manage and to know exactly what you need to spend each month on the mortgage can be unsettling. However, it can be really good when rates are falling as you are paying less which is good. The tracker rate has to fall immediately when rates fall as well, when many mortgage rates have a delay or do not change when there is a fall in rates, but they tend to always go up immediately if the rate increases.


A tracker is probably a bit of  a gamble then, but it can mean that you get a fairer deal in some cases. If you can find one that is cheap, then this will mean that you are likely to get a good deal for the term of the mortgage. Watch out for hidden costs though, as with all mortgages there might be administration costs or other fees and so you need to add these in when you are comparing. These will be paid out in the terms and conditions which you should be able to find easily on the lenders website. They may take a bit of reading, but it is worth it. You could always ask the lender directly what all of their costs are. These are normally fees for opening the account, paying back early or over paying and late payments. There will also be costs for doing searches and things like that.