Tracker mortgages

Friday, 20 January 2006 12:00

A tracker mortgage is a loan secured against a property where the interest charged is guaranteed to maintain a set relationship with, or "track", Bank of England base rate.

This will typically be cheaper than a capped, flexible, or fixed-rate mortgage - but while the cost of a tracker mortgage will fall if interest rates fall, it does not protect the mortgage-holder against rises in interest rates.

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