Variable, Discounted & Tracker

Variable Rate

The interest rate on a variable rate mortgage can change during the term of your mortgage, broadly in line with interest rates in the economy as a whole. This may be useful if you want to keep your mortgage straightforward. You need to be sure that you can afford any potential increases to your mortgage payments in the future.


A tracker scheme usually gives you cheaper monthly payments than you would pay under the lenders standard variable rate. Sometimes the scheme runs for a short period, otherwise it may run for the life of the mortgage. The scheme pay rate is linked to the Bank of England base rate and can vary up or down. The pay rate under a tracker is often comparable to that offered under discounted rate schemes.

Discounted Rates

Some lenders will offer a discount off their standard variable rate for a short period. Usually this will be between 3 months and 5 years. This means that you will have cheaper payments for a period of time. The rate that you pay could vary; additionally once this discount has expired the interest rate will usually revert to their standard variable rate.

You need to be sure that you can afford potential increases to your monthly repayments during the scheme period and once this finishes.