Tracker Mortgages

Discount tracker mortgages

To confuse matters, you can also get discount tracker mortgages.
Read about discount tracker mortgages in our discount mortgages section.

Lifetime tracker mortgages

Some mortgage lenders offer lifetime tracker mortgages, which will track the Bank Rate for the entire life of your mortgage by a guaranteed maximum percentage.

So they may promise never to charge you more than 1% above Bank Rate, for example. Again, lifetime tracker mortgages tend to come with relatively small fees, and with no ERCs attached.

Pros and cons of tracker mortgages

• Tracker mortgages are straightforward and transparent, and some people like them because they the mortgage lender cannot influence the rate once its margin is set.
• The rate you pay fluctuates directly in line with the Bank Rate set by the Bank of England, rather than being attached to the lender's own Standard Variable Rate, which it can alter whenever it chooses for commercial purposes.
• You can switch straight out of a tracker mortgage without paying an Early Redemption Charge (ERC), unless there is a discount on the tracker mortgage, in which case ERCs will apply during the discounted period.
• Tracker mortgages can be simple products for lenders to design, so they tend to come with lower fees than fixed, capped or discounted rates.

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