What Are Tracker Mortgages?

When you are ready to buy your first home, you may be confused about the many different types of mortgage that are on offer. Here at Central Mortgages our team of specialist advisors will be able to take you through what the different types are, and how to find the mortgage best suited to your needs. This article deals with tracker mortgages, what they are, and how long they last.

The Tracker Mortgage

Many people often put off buying their first home for longer than necessary because they donbt fully understand the terms that are used concerning various mortgages. You may have heard people talk about variable rate mortgages; here, the rate of interest that is paid will vary according to the base rate of the Bank of England. The interest may be, for example, 1% above the Bank of Englandbs base rate. A tracker mortgage, where the rate you pay btracksb the Bank’s base rate, is just one of the many different types of mortgage your lender may offer you.

At Central Mortgages we aim to give our clients an understanding of the full range of mortgages and which might best apply to them. Tracker mortgages may be granted for the life of the loan, e.g. fifteen or twenty-five years, which is common for many mortgages, or it might only be for one year. When the allotted time of the tracker mortgage ends, then your lender may transfer you to a standard variable rate mortgage, which means you could be paying a higher rate of interest.