When looking at different types of mortgage products, you might come across something called a tracker mortgage.
This type of mortgage works differently from a fixed rate, as the interest rate follows the movements of the Bank of England base rate rather than staying the same throughout your deal period.
A tracker mortgage is designed to “track” the base rate at a set percentage above it.
Let’s say, for example, if the base rate is 5% and your tracker deal is 1% above this, your mortgage rate would be 6%.
If the base rate rises or falls, your mortgage payments will increase or decrease in line with that change.
How does a tracker mortgage work?
Unlike fixed rate mortgages where your repayments stay the same for an agreed period, a tracker mortgage can change from month to month.
The rate is directly tied to the Bank of England base rate, which is reviewed approximately every six weeks.
If the base rate goes up, your payments will rise, and if it comes down, you may benefit from lower repayments.
Our mortgage advisors in Cambridge often discuss tracker mortgages with customers who feel comfortable with variable payments, particularly during periods when the base rate is low or stable.
Benefits Of A Tracker Mortgage
One of the main advantages of a tracker mortgage is the potential to pay less if the base rate falls.
This flexibility can be appealing to home buyers or those looking to remortgage who are keeping an eye on the wider economy.
We find that some customers like the transparency of knowing exactly how their rate is calculated, especially compared to some other variable rate products that lenders control directly.
If you’re considering a remortgage, you might want to explore whether a tracker option could suit your circumstances.
Our remortgage advice in Cambridge can help you compare deals and understand how variable rate products like trackers work alongside fixed or discounted options.
Things To Consider With A Tracker Mortgage
While the potential for lower payments is attractive, a tracker mortgage also carries the risk of rising costs if the base rate increases.
This means it might not suit someone who needs certainty in their monthly budgeting.
Some tracker deals come with a collar, which is a minimum rate your lender will charge even if the base rate drops below a certain level.
Others may include early repayment charges, especially if you leave the deal before the end of the initial term.
Before choosing a tracker mortgage, it’s important to weigh these factors carefully.
Speaking with a mortgage broker in Cambridge like ourselves can help you assess whether this type of product fits your situation or whether a fixed rate would provide more peace of mind.
Is a tracker mortgage right for you?
A tracker mortgage could be a good option if you are comfortable with some fluctuation in your repayments and believe that the base rate may stay the same or fall in the near future.
It’s often more suitable for those with financial flexibility who can handle potential increases if rates rise unexpectedly.
If you’re a first time buyer in Cambridge, and unsure which mortgage type to choose, our team can help you explore all available options are here to support you in finding the right product for your needs..
Date Last Edited: July 15, 2025
