Tracker Mortgages are linked to an index such as the Bank of England base rate which can move up or down, therefore if the index changes your monthly payment will change too.
Tracker mortgages are also available over different terms typically between 2 and 5 years as with fixed rate mortgages you will also normally be charged an early repayment charge if you choose to repay your mortgage early (as defined in your mortgage terms & conditions).
Advantages of Tracker Rate Mortgages
Currently (Jan 2016) the rates on tracker mortgages tend to be slightly lower than on fixed rate deals (although this can change with market conditions) and it’s easy to understand what you will be paying each month as it is directly linked to a particular base rate.
Disadvantages of Tracker Rate Mortgages
You won’t have the same security with a tracker mortgage as you would with a fixed rate mortgage because the rate is variable. You have to be aware that your mortgage payments could rise as well as fall and it is important to make sure that you will still be able to make your mortgage payments if this happens.
Your Home may be Repossessed if you do not keep up with your Repayments
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