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Tracker mortgages so called because they track, or follow, the Bank of England Base Rate. The actual rate you pay is pegged at a fixed margin to the Bank of England Base Rate, so the rate you pay rises and falls exactly in tandem with any decisions made by the Bank of England Monetary Policy Committee.

Trackers were invented because some lenders would often increase their variable rate mortgages, including their discounted deals, by a greater margin than any increase announced by the bank. Similarly, some lenders would pass on smaller cuts in interest rates than the Bank of England actually announced.

In this way lenders could increase their profit margins but their borrowers were not getting a fair deal.

Trackers ensure that you always benefit in full from any cut in rates and that you do not pay over-the-odds if rates rise.

Discounted trackers can offer some of the lowest rates on the market. However, the discounts usually only last a couple of years before reverting to a set margin above the base rate, so they need constant monitoring to ensure you are not paying more than necessary.
However, some lenders offer lifetime tracker deals that last for the full term of your mortgage.

For the best tracker deals, speak to one of our expert advisers on 0800 358 5068.