Tracker Mortgage
What is a Tracker Mortgage?
The interest rate of the mortgage is equivalent to the Bank of England base rate + interest
Example: if the base rate is 0.5% you could pay plus 3% for a rate of 3.5%
When the base rate falls your mortgage payments will reduce
If the base rate rises your mortgage rates will rise
Tracker mortgages are normally an introductory offer for a set period of years, some can be for a lifetime that will last the duration of your mortgage contract
Some mortgage lenders will set a minimum rate for you to pay
Who is a Tracker Mortgage best suited to?
The optimist who predicts the base rate will fall
Those who are comfortable riding the changing rate wave!
Discount Hey? What is a Discount Mortgage?
A reduced version of a lenders variable rate for you
The discount is fixed, and the reduction is applied whether Standard Variable Rates (SVR) rise or fall
Fact: Discount Mortgages are an introductory offer, after the agreed term you switch to your mortgage lenders SVR. Most discount mortgages are capped.
Who would best suit a Discount Mortgage?
First time buyers, looking for a cheaper rate to pay to start off with, and be prepared for the SVR increase at the end of term agreed.