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.