| Tracker Mortgages |
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The tracker mortgage is a loan with an interest rate set at a specific margin above the Bank of England base rate. So, for instance, if you agree to pay a tracker rate of 1 per cent above base rate and the base rate is 6 per cent, you pay 7 per cent. When the Bank of England’s rate changes, your mortgage rate will change accordingly, but maintaining that 1 per cent differential. During the period of the tracker, your lender can not increase the interest rate you pay unless the Bank of England increases its rate.As with discounts and fixed rates, the tracker tends to last for a certain period only and then your mortgage will revert to the lender’s standard variable rate. Some borrowers with trackers have recently discovered that their lenders have put a limit to the level at which rates could fall in the small print. So, if your tracker is set at 1 per cent above base rate and the lender has limited any drop in rates to 3 per cent, if base rates fall below that level, your tracker rate will stick at 3 per cent until rates go up again and then the tracker differential will restart. Check the small print. Add this page to your favorite Social Bookmarking websites          
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