Tracker Rate Mortgages
Tracker rate mortgages are home loans where the interest rate which you pay is based on an external rate which is usually the Bank of England’s base rate plus a set percentage. Tracker mortgages do not tie you down to a fixed interest rate, so your payments can fluctuate from month to month. So, when the external interest rate increases or decreases, your tracker mortgage rates will also change to reflect this.
If you have a tracker mortgage deal, the amount of interest you pay on your home loan might be the base rate plus or minus a certain percentage. As the mortgage tracks the base rate, the rate that you will pay will change, similarly to standard variable rate mortgages. So, when you are considering a tracker rate mortgage it is important that you have the capital available to still afford your repayments if the external rate rises.
Tracker Mortgage Rates
Tracker rate mortgages are a type of variable rate mortgage, so with each monthly mortgage payment part of the money paid goes towards the interest charged by the lender and the other part towards repaying the capital borrowed. If there is a rise in the Bank of England base rate, the extra money which is paid would only go towards the increased interest charges. So, although you will be paying more each month, you will not be clearing a larger proportion of your mortgage debt.
Get in touch with us today by phone or email if you require tracker mortgage advice from our mortgage advisors here at Stuart Brown Mortgage Services.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up the repayments on your mortgage.
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