A tracker mortgage is dependent on the Bank of England Base Rate, meaning when this fluctuates, your monthly repayments will also change accordingly.
The interest payable on a tracker mortgage is usually a certain margin above the Bank of England Base Rate – for example the Base Rate plus 1.00% with some trackers having a “floor” of which the rate will not fall below.
Lifetime trackers track the Base Rate for the full life of the mortgage. They tend to be at a higher rate than other trackers however due to not having to switch lenders or products every couple of years, they could work out financially better for you.
The current Base Rate is at an all time low meaning people are taking full advantage of the current competitive tracker deals available on the market. It is worth noting, that when the Bank of England Base Rate does raise, your monthly repayments will increase too. At this point, you could opt to move onto another rate however an early repayment charge may become payable.