Tracker Mortgage

What are Tracker Mortgages?

Tracker Mortgages (also sometimes known as Rate Tracker Mortgages) are a type of mortgage that adjust in-line with the Bank of England Base Rate, plus a certain percentage, depending on the mortgage offer.

As is the nature of this type of mortgage, any reduction in the Base Rate will be passed on to the borrower, meaning cheaper monthly payments, but conversely any rise in the base rate would mean an increase in interest.

Tracker mortgages are sometimes confused with Discount Mortgages, which are similar, but base their figure on the lender's Standard Variable Rate, rather than the Bank or England base rate. These therefore run the risk that any drop in the base rate will not have an affect on the mortgage rate.

For those wanting the security of a fixed repayment amount each month, fixed rate mortgages may offer a safer option.


Q: How do they work?

A: A tracker mortgage usually works out as the base rate plus an advertised percent (usually between 1-3%). These are sometimes capped, so there’s a set maximum amount you can end up paying.

Q: How do they affect my credit file?

A: Much like any other mortgage, as long as you keep up payments, your credit file will benefit from a tracker mortgage for the duration of your payments as it will show other lenders your ability to make credit commitments on time.

To see how your mortgage appears on your Credit Report, you can try checkmyfile FREE for 30 days, then for just £14.99 a month afterwards, which you can cancel at any time.

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