Upon application a fee of up to £495 will be payable (typically £195)
Tracker mortgages follow the Base Rate – or Bank Rate – of interest, which is decided upon by the Bank of England. The mortgage will then be fixed at a specific percentage either above or below the Base Rate. In consequence, this means that payments for your mortgage will alter as interest rates do, so that if your tracker mortgage is the Base Rate +2% and the Bank Rate is 2%, then you will pay 4%.
The obvious risk with a tracker mortgage is that if the Base Rate rises, then your payments will too. Some lenders offer capped tracker mortgages so that even if the Base Rate rises past a certain point, your mortgage rate cannot increase any further.
If rates fall then so will your payments. This lowering of the Base Rate allows you to take advantage and make greater repayments so that if the rate rises again, there is a lesser total amount to be repaid.