Tracker Mortgage
What is a Tracker mortgage?
A tracker mortgage is a type of variable rate mortgage which “tracks” a base rate – usually the Bank of England’s base rate. If you get a tracker mortgage, your mortgage repayments (including the interest you pay on your mortgage) could change every month.
What’s The Difference Between A Tracker Mortgage And A Fixed Rate Mortgage?
A fixed-rate mortgage’s payments don’t change – at least for the short term. Fixed-rate mortgages offer a good value rate for a limited time, so if you need to budget effectively and you want to know how much you’ll be paying every month, they’re ideal. Your payments also won’t go up throughout the mortgage’s lifespan, no matter how high rates go.
However, you won’t get reduced mortgage payments if interest payments drop – one of the benefits of tracker mortgages.
What Are The Benefits Of A Tracker Mortgage?
What makes a Tracker mortgage a good option? Here are some benefits:
- If the Tracker mortgage is following the Bank of England, if the interest rate drops, so will repayments- although the same will happen if it rises, turning this advantage into a disadvantage.
- Introductory rates can be favourable.
- Early Repayment Charges tend to be more affordable when compared to other mortgage deals and types.
An Early Repayment Charge (ERC) can be paid in order to exit your current deal and find a new rate.
What Could A Tracker Mortgage Be Right For Me?
As we are a mortgage broker, we have access to a wide range of lenders and as such, many Buy to Let mortgages are available, including Fixed Rate and Tracker Mortgages.
A Fixed Rate allows you to know exactly what you pay monthly and enable you to manage your cash flow, it does often mean a slightly higher rate than a Tracker Rate. You will however be protected from any rate rises made to the Bank of England base rate.
A Tracker Rate will often be cheaper than a Fixed Rate. However, you must be aware that your monthly repayment will fluctuate according to the Bank of England base rate, whether this goes up or down and you will need to make the repayments accordingly.
One thing is always guaranteed, we work hard to find the deal that is Best 4U!
What Other Mortgage Options Are There?
If a Tracker mortgage isn’t for you, we offer other mortgage options, including Lifetime Mortgages, Buy to let Mortgages and Complex Income Mortgages
Why Best 4U?
As an independent mortgage broker, we are only interested in getting the best deal for our clients! We work with a wide range of lenders and can view the whole of market, with your goals and dreams in mind we can help you to get the deal that is Best 4U!
We take the time to get to know our clients, understanding what they’d like to achieve, and we work with them to get them there – as fast as possible! With over 25 years of experience and thousands of happy clients, we really do believe in and love what we do!
