Tracker and lifetime tracker mortgages
Tracker mortgages are products that are linked to the base rate. If the base rate is one percent, the mortgage repayments will be charged at base rate, one per cent, plus a further charge which will vary according to the lender. This could be base rate plus 1.5 per cent which means the total charge would be 2.5 per cent.
Tracker mortgages are attractive products when the Bank of England base rate is low but if the base rate increases so will the repayment charges on a tracker mortgage. Tracker mortgages have a degree of risk to them because if the base rate increased to two per cent so the repayment charge on an associated mortgage would follow that increase.
Lifetime tracker mortgages track the base rate for the entire length of the mortgage. The lender will guarantee that the rate of repayment is not more than, for example, one per cent above base rate. The benefit here is that the borrower is not subject to the commercial decisions of the lender who can raise rates whenever they choose but the repayment is instead linked directly to the base rate that is set by the Bank of England.
- Fees are free on HSBC's tracker mortgages in January sale
- A guide to tracker mortgages
- Santander announces new tracker mortgages
- Nationwide cuts rates on fixed rate and tracker mortgage deals
- Halifax Housing market Confidence tracker at 20-month high
- The top ten tracker mortgage deals for all borrowers
- Santander reduces rates on tracker mortgages
- Yorkshire BS cut tracker mortgage rates
- Lifetime tracker mortgages
- Leeds BS unveils two year tracker mortgage