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Types of mortgage

Tracker mortgages

By Marie Kemplay

Article 8 of 10

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Tracker mortgages

Get to grips with the pros and cons of tracker mortgages and work out whether they're the right type for you. 

What is a tracker mortgage?

A tracker mortgage is a type of variable rate mortgage. The interest rate tracks the Bank of England base rate at a set margin (for example, 1%) above or below it.

When we surveyed 5,002 mortgage customers in April 2016, we found that around one in ten (11%) had a tracker deal. Trackers can last for as little as one year, or as long as the total life of the loan.

Once your tracker deal comes to an end, you're likely to be automatically transferred onto your lender's standard variable rate (SVR). Typically, this will have a higher rate of interest.

  • A tracker mortgage is just one of many different types of mortgages, and it's important you get the right sort for you. Which? Mortgage Advisers will look at every available mortgage on the market and recommend the best one for your personal circumstances. You can call for a free initial consultation on 0808 252 7987.

2.42%Average tracker rate - March 2017

Note: This figure is the average initial rate of all base rate tracker mortgages on the market at the time of writing.

Tracker mortgage pros

  • In certain economic circumstances, borrowers can secure tracker mortgage deals with very low rates of interest. For example, with the current historically low base rate of 0.25%, a +1% tracker mortgage would charge a rate of just 1.25% interest.
  • While your tracker mortgage rate is low, you can take the opportunity to overpay on your mortgage. This will either reduce the total length of time it will take you to pay off your mortgage or mean that you can make smaller subsequent monthly payments. Either of these options will mean that you pay less interest in total. Many lenders will now allow you to overpay on a tracker mortgage without incurring any financial penalties.
  • In addition, your rate is not dependent on your lender's SVR, just changes in the base rate.

Tracker mortgage cons

  • On the other hand, as a variable deal a tracker mortgage will not provide total rate security: if the base rate changes, so too will the interest rate you pay.
  • So, if you need to know exactly how much your monthly mortgage repayment will be each month, a tracker mortgage might not be the best option for you, and you could be better off considering a fixed-rate mortgage instead.
  • If you want to leave a tracker mortgage deal before the end of the set term, you're also likely to be charged an early repayment fee.
  • Last updated: March 2017
  • Updated by: Dean Sobers

Correct as of date of publication.


Your home may be repossessed if you do not keep up repayments on your mortgage.

Which? Limited (registered in England and Wales number 00677665) is an Introducer Appointed Representative of Which? Financial Services Limited (registered in England and Wales number 07239342). Which? Financial Services Limited is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited. Registered office: 2 Marylebone Road, London NW1 4DF.