A tracker mortgage is a loan secured against a property where the interest charged is guaranteed to maintain a set relationship with, or “track”, Bank of England base rate. This type of mortgage will typically be cheaper than a capped, flexible, or fixed-rate mortgage, but while the cost of a tracker mortgage will fall if interest rates fall, it does not protect the mortgage holder against rises in interest rates. Tracker mortgages tend to be very popular and are often aimed at first time buyers with attractive initial offers. All high street lenders will offer Tracker mortgages which means that they are plentiful and usually competitive.

The Tracker mortgage is usually offered for a set amount of time perhaps 2-5 years after which the mortgage will revert to the standard variable rate. However, there are Lifetime Tracker mortgages which Track the Bank of England rate for the whole lifetime of the mortgage. Although Tracker mortgages don’t offer the absolute certainty of level of future repayments that Fixed Rate mortgages do for instance they do offer the added comfort of knowing that if the base rate plunges you are not tied to the previously higher rate.