There are not so many mortgage options available at the moment as many major lenders have drastically reduced their product range. You should still be able to find a lender that will offer a tracker mortgage if you can raise the required deposit.
Basically a tracker mortgage follows the Bank of England’s base rate. With a tracker mortgage your interest rate, and hence your monthly repayment, will go up or down based on what the Bank of England is charging to lend money to other institutions. The rate that you pay will not be the same as the base rate but will move up or down with it, but always with a set differential. You can therefore benefit quickly when the Bank of England cuts its base rate as you do not have to wait, as many borrowers do, to see if their lending institution is going to lower its rates at all. You must remember of course that interest rates don’t always go down, so you must allow yourself some flexibility in your personal finances to deal with an unexpected hike in interest rates. Over the last few years we have become used to interest rates being around the five percent level but not so long ago they went as high as twelve percent.
To find out if a tracker mortgage is for you speak to your potential lender who will fully explain the terms and conditions and most importantly, the current rate of the required monthly repayment.
