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Your home may be repossessed if you do not keep up repayments on your mortgage

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.

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Tracker Mortgages Made Easy

  • There isn’t so much a catch with a tracker mortgage, however you may find it more difficult to budget as your rate may be prone to regular changes. But as long as you are aware that if the Base Rate rises then your mortgage payments will too, then you can cater for this when the time comes.
  • Having a tracker mortgage means that you are reliant upon the Bank of England as opposed to an individual lender. This may make it easier to monitor rate fluctuations.
  • Changes in rates are decided upon on the first Thursday of each month. When making this decision, the Bank of England looks at the current state of the economy and the levels of borrowing across the country, in order to determine how the Base Rate will change.
  • Most lenders will allow you to switch from your fixed rate mortgage to a tracker mortgage, however this may incur an early repayment charge for ending your mortgage prematurely.

If you wish to pursue a tracker mortgage, our advisors at The Mortgage Broker (Protection) Ltd will provide no obligation advice, whilst searching a range of mortgages from across the market, so that you leave happy and 100% satisfied with your choice of mortgage.