A tracker mortgage is very much like any other mortgage in most ways. However, whereas the standard variable rate mortgage interest rate is set by the lender, a tracker mortgage has its interest rate set with reference to in most cases, the Bank of England’s Base Rate.
The Bank of England reviews its base rate every month and sets the rate as a means of setting the cost of money banks ‘buy in’. As the rate rises lending rates are likely to follow. With a tracker mortgage the mortgage interest rate specifically tracks indices like the Bank of England Base Rate.
If the Tracker Mortgage interest rate is set at 2% above Bank of England Base Rate then if the Base Rate were to rise from 0.5% to say 1%, then the mortgage interest rate would rise accordingly from 2.5% to 3%.
At the time of writing (November 2015) the Bank of England Base Rate remains at an historically low 0.5%. Base Rates can rise for many reasons but generally, as the economy grows and inflationary pressures are felt in the general economy, the Bank of England will aim to gradually increase their Base Rate to control inflation and protect the value of the currency.
It’s worth noting that in most scenarios, a bank’s standard variable rate will probably rise and fall as the Bank of England’s Base Rate rises and falls anyway. But a Tracker Mortgage makes this link explicit.
For more information about tracker mortgages contact us or speak to a mortgage adviser on 01628 507477.
Download our Free First Time Buyers Guide
Recent posts
A recent study by Boon Brokers where 1,000 people who had used an estate agent over the last year were surveyed, showed that a whopping 52% said they were pressured into using the estate agents’ in-house mortgage broker.
When will mortgage rates fall further?
7 days ago
Analysts are predicting further rate cuts this year, with the next one possibly coming down to 4% when the Bank of England’s Monetary Policy Committee meet on Thursday 7th August 2025.
The Financial Conduct Authority (FCA) has shared new changes to mortgage rules with the aim to simplify remortgaging, and encourage competition within the mortgage market.
Lloyds boost lending for first-time buyers
14 days ago
Lloyds Banking Group has jumped on the bandwagon to boost lending for first-time buyers as they allocate an additional £4 billion to help first-time buyers on to the property ladder.
As the Loan to Income (LTI) cap has been increased to 5.5 times income, applicants who fit the First Time Buyer Boost criteria could borrow up to 22% more.
The government is introducing mortgage reforms to boost homeownership, stimulate economic growth, and make the housing market more accessible, especially for first-time buyers.
Chancellor Rachel Reeves has announced the most significant mortgage reforms in over a decade—great news for those dreaming of homeownership.
Nationwide ease criteria for first-time buyers
17 days ago
Nationwide ease their ‘Helping Hand’ mortgage designed to help first-time buyers get onto the property ladder by allowing them to borrow up to six times their income.
Ways to save money over the summer holiday
23 days ago
Keeping the kids entertained over the six-week summer holidays isn’t always easy, especially with the cost-of-living making it even more difficult. Below is a list of fun, inexpensive ideas to do over the break
The Financial Conduct Authority (FCA) has published a discussion paper about the future of the mortgage market in a bid to improve access for first -time buyers, self-employed, and those borrowing in retirement.
More information
Trusted by
