Tracker Remortgages

Tracker Remortgages are a reasonably new type of remortgage. Often allowing one to sit back, relax and be safe in the knowledge that the rate will follow any changes to the Bank of England base rate (particularly downward movement).

Tracker Remortgages are as their name would suggest - The remortgage rate fluctuates as the market adjusts.

One can usually choose from 4 different products, which typically either have a discount for the first 2 years or a low tracking rate for the life of the mortgage.

  • 2 Year Discount Tracker mortgages - Often available for first-time buyers, relocating to a new home or looking to move your mortgage to a new remortgage lender
  • 2 Year Discount Tracker Remortgages - Often offered if you're looking to move your mortgage to a new mortgage lender
  • Lifetime Tracker mortgages - Often available for first-time buyers, relocating to a new home or looking to move your mortgage to a new remortgage lender
  • Lifetime Tracker Remortgages - Often offered if you're looking to move your mortgage to a new mortgage lender

Tracker Remortgage Interest Rates

A Tracker Remortgage typically has an interest rate set slightly above the Base Rate, but usually just below the remortgage lender´s Standard Variable Rate (SVR).

As the Base Rate is increased or decreased, the tracker rate moves accordingly and the monthly payments also go up and down, even if the remortgage lender does not change their SVR.

The Advantages of a Tracker Rate Remortgage

They are usually little bit cheaper than a Standard Variable Rate Remortgage and one will benefit from a downward movement of the Base Rate, (even if the lender does not decrease their own standard variable rate).

The Disadvantages of a Tracker Rate Remortgage

  • Be aware that there´s no protection against an increase in the Base Rate and no ‘cap’ on how much one could be charged.
  • A volatile mortgage market could cause the mortgage repayments to rise considerably.

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