ATracker Mortgagewill literally follow the movements of a standard rate so that if the standard rate goes up or down a Tracker Mortgage will literally mimic its movement.
The Standard rate on which the Tracker Mortgage is based can either be the standard rate of the Mortgage lender or the Bank of England Base Rate
In recent times many people have switched to a Tracker Mortgage and saved significant amounts of money on the monthly Mortgage Repayments
If you would like independent Mortgage advice on a Tracker Mortgage to make sure that you get the best Tracker Mortgage deal then an Independent financial adviserwill be able to give it to you
The Advantages of a Tracker Mortgage
As thousands of people found in 2008, when rates are low a Tracker Mortgage can make an unbelievable difference to your monthly mortgage repayments, potentially saving hundreds of pounds per month
The Savings that can be made on a Tracker Mortgage when rates are low could allow you to make over-repayments towards your Mortgage and pay it off early. Your Independent Financial Adviser would be able to calculate the difference your over-repayments would actually make
With a Tracker Mortgage you could also get a discount rate and some lenders will allow you to take payment breaks giving you a degree of flexibility.
The Disadvantages of a Tracker Mortgage
When you take out a Tracker it is important to find out what rate it is tracking. If it is tracking the lender's standard rate you could find that the lender can increase this rate even if the rates in the market haven't moved. This would mean that your Tracker Mortgage Repayments increase.
As with any Mortgage, if you are considering a Tracker Mortgage make sure you know exactly what set up fees and early redemption penalties are involved as well as any other potential costs. You also need to be aware that if interest rates change then your Tracker Mortgage could start costing you more.
