Tracker rate mortgages
Tracker rate mortgages do as the name suggests; track the lender's base mortgage rate.
Similar to discounted rates except that they are linked directly to the Bank of England Base Rate and will move in line with the market. Early repayment charges are also generally payable but you can get more flexibility for overpayments than a traditional discounted or fixed rate.
The recent reduction in the base rate has led to the lenders increasing the margins above the base rate. The average rate is now 2.99% above base (3.99% initial pay rate) so when rates start to increase again you may find your payments increasing to over 6% or 7%.
A number of trackers are now linked to the base rate for the whole term with an initial 3 year tie-in. This allows the borrower to keep the same product without a sudden hike to a standard variable rate after 2 or 3 years as before. There are early redemption penalties in this initial 3 year penalty but you can save on remortgage costs if the base rate is still at a competitive level.
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Bestinvest Mortgage Services is an independent brokerage that researches the entire market before any recommendations are made. As part of the Bestinvest group of companies you can be assured of receiving a high quality service coupled with excellent competitive deals.
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Mortgage Best Buys
Switching to a cheaper and more flexible mortgage deal has never been easier. We take care of all the legwork; all you have to do is give us the go-ahead to hunt for a better deal on your behalf.
It's well worth checking, you could save tens of thousands of pounds over the years.
The Annual Percentage Rate (APR) is the overall cost for comparison over the term of the mortgage.
To find out just how much we can save you call 020 7189 9999.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.