Mortgage and Refinancing Information Channel:

We would like to thank the local libraries, schools, and universities for recommending students to visit us when doing research on any of our information topics.
 Please check back frequently as new topics are added and current topics are updated daily.

What is a Tracker Mortgage?

A tracker mortgage 'tracks' the Bank of England base rate, meaning your mortgage stays in line with interest rates and the market in general. The result on your monthly mortgage interest payments is that they go up when the base rate goes up and go down when the base rate goes down.

A tracker mortgage works in a similar way to a standard variable rate mortgage in that it follows the rate imposed by the Bank of England. Whereas the standard variable rate mortgage changes monthly or annually a tracker mortgage usually guarantees to follow changes in the bank base rate within 14 days of it happening. Thereby the borrower benefits from both falls and rises in the interest rates sooner.

A tracker rate is one that has a fixed differential to the Bank of England rate and is contractually bound to change within a certain time of the Bank changing its rate. Thus, the tracker mortgage might follow the base rate up and down as it fluctuates. The mortgage lender will make profit by charging an amount over the base rate.

This kind of mortgage is useful for people who are happy for their outgoings to change, but want their mortgage to reflect the changing costs of borrowing. Tracker mortgages are often suited to borrowers who are looking for cheap initial payments and can take the risk that their payments could increase at a later date.

The main difference from a variable rate mortgage is that a tracker mortgage will be guaranteed to go up and down with changes to the interest rates. A variable rate mortgage will not.

There are three basic types of tracker mortgages: ones that track the base rate for the life of the loan; and those that run at an agreed differential to the base rate for a given amount of time before returning to the standard variable rate; and finally those in that the lender promises that the difference between the base rate and the mortgage rate will not go beyond a certain level.

When people are remortgaging, it's tempting to be attracted to the best mortgage rate on the market, which often tends to be a discount or a tracker mortgage.

You may freely reprint this article provided the author's biography remains intact:

About The Author

John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available loans via the http://www.directonlineloans.co.uk website.

MORE RESOURCES

used office furnishings-supplies-equipment-desks-cubicles-service-counters for sale in Akron Ohio   Die cast model cars for sale in Akron Ohio  
used cars for sale in Akron Ohio   unfurnished homes for rent in Akron Ohio

RELATED MORTGAGE AND REFINANCING ARTICLES: Buying a Home when Rates go Up Many people fret the rising tide of interest rates. You'll hear things like, "Did I miss the boat? Is it too expensive now to buy a home? How can I afford the house of my dreams? Maybe I should wait! Maybe I should just rent for a while! Maybe the rates will go down in a few weeks. What is a Current Account Mortgage? Current account mortgages are fairly new to the sector. They are quite different to other types of mortgage as they enable you to set off all your savings and debts in one single account. Buying A Home After Bankruptcy - Get A Mortgage Loan After Bankruptcy If you have a recent bankruptcy on your credit and are looking to get financing for a home, there is hope. Buying a home with bad credit will just put more emphasis on the other two factors needed to get a mortgage loan, which are; income verification and a down payment. Residential Mortgage - Finding The Best Home Mortgage Lender Most people approach the act of getting a home mortgage purchase or refinance loan the wrong way. They timidly approach lenders and cross their fingers that they will quality for that all-important loan. Home Mortgage Interest Rates: How to Compare Whether you are looking to purchase your first home, sell your current home and purchase a new one, or you are wondering whether or not you should refinance your existing mortgage, it is beneficial to compare current home mortgage interest rates from several companies to be sure you get the best deal possible. They can be researched very easily online, and you can tailor your search to give you accurate rates based on the state that you will live in, whether you are buying or refinancing, and the amount of the loan. Bad Credit Home Financing - Get The Mortgage Loan You Want Even With Poor Credit Having poor credit alone cannot hold you back from getting the home loan you want. Buying a home that is everything you want in a home, is a very exciting experience. How to Compare Fixed Rate Mortgages and Adjustable Rate Mortgages There are many types of mortgages, and the more you know about them before you start, the better. To compare one Adjustable Rate Mortgage with another or with a fixed-rate mortgage, you need to know about indexes, margins, discounts, caps, negative amortization, and convertibility. Be Prepared With Your Home Equity Loan Checklist A home equity loan can be an excellent way to obtain money in order to pay off high interest bills or consolidate your current debt into one monthly payment. A home equity line of credit is a form of revolving credit in which your home serves as collateral. Florida Refinance - Refinancing in Florida The decision to buy a home in Florida can be one of the best you will ever make. If you own a home in Florida you may be considering refinancing. Home Loans For People With Bad Credit - Tips To Getting Approved Online Buying a home with bad credit doesn't have to stop you from finding an affordable lender. By shopping online for a lender you can find the best lending rates for your situation. Are You Ready for a 40-year Mortgage? Real estate prices have been increasing steadily over the last five years, particularly on the East and West coasts. In parts of California, homes are selling for 33% more than they were a year ago. Home Mortgage Lenders - How to Find A Good Mortgage Broker Online Mortgage lenders have set up shop online, but they aren't all reputable mortgage brokers. To find a good mortgage lender you need to compare rates and research to find reputable companies. Home Equity - Is it Time to Cash Out and Move? During the last five years, home prices have increased nationwide. In some parts of the country, notably California, home prices have doubled or even tripled. Homeowner Loans - What's Available? It isn't difficult to get a homeowner loan if you own your own home, hundreds of UK lenders will lend up to 95% Loan to Value of your property and some as much as 125% Loan to Value if you find you have little or no equity at all. Homeowner loans are available to those that own or pay a mortgage on their house, bungalow, flat or cottage. Secured Loans - Making the Most of Your Home as Collateral My visit to the lender was interrupted with my wife demanding a reason for my preference for secured loans. Though I hushed up the matter then, it kept on ringing in my mind hours later. Mortgage Information for the First Time Homebuyer Inflation in the United States is increasing rapidly and home prices are soaring! There are millions of american families that are unaware of the many mortgage programs that are available for first time homebuyers. There are many types of mortgage finance programs available to first time homebuyers. What is a Fixed Rate Mortgage? As the term implies, with a fixed rate mortgage the mortgage rate is fixed for a set period of time, so no matter what movements occur in the lender's standard variable mortgage rate, the borrower's arrangement is fixed and, therefore, so are the monthly fixed rate mortgage payments. A fixed rate mortgage would suit someone who likes to know where they stand. Home Buying - What Can You Afford? Okay, you've decided to buy a home and are trying to figure out what you can afford. Before you go home buying, you need to carefully consider what you can afford as far as a mortgage payment. Why Refinance Back into a 30-Year Loan? One of the biggest reasons homeowners refinance their mortgage is to obtain a lower interest rate and lower monthly payments. By refinancing, the borrower pays off their existing mortgage and replaces it with a new one. To Refinance or not to Refinance -- Here is the Answer I have written many articles on refinancing a fixed rate mortgage to an adjustable rate mortgage. I have helped people cut as much as $800 off their monthly payments by turning their high fixed rate mortgage loan into a much lower ARM.

HOME | SITE MAP © 2012 - 2023 All Rights Reserved Increase pagerank with HitsSurfer