How well do you know the money market? A tracker rate mortgage has a variable rate, usually a set percentage above or below the Bank of England?s base rate. The arrangement is for a specified period of time, generally the first few years of your mortgage. Your monthly payments will move up and down according to the fluctuations of the base rate.
One of the advantages of a tracker is that your interest rate is ?tied? to the Bank of England?s, not your lender?s SVR. This means that your rate is set by an independent body, and even if your lender decides to make a steep hike in their rates, you will be unaffected. If the base rate falls, you will benefit from a drop in monthly payments. However, by the same token if the market rises you will be subject to increases View the rest of this article
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