Base Rate Tracker Mortgages - Cheap Mortgage Deals

As with standard mortgage products, the tracker can come with a fixed, discounted, stepped, flexible and capped rate of interest. Base rate trackers mirror the exact changes to the base rate (as opposed to variable rate mortgages that follow the standard variable rate).

The interest for this type of mortgage is usually set at a rate of between 1 to 2% above the base rate and remains constant for the entire duration of the loan. It will not revert to the standard variable rate at any time.

The fixed tracker mortgage means it will be fixed for a period of time - often for between 1 to 5 years. When the initial period is over the mortgage will then revert to a tracker with the possibility of a tie in period.

The discount tracker mortgage means one that follows the base rate for a period of time during the earlier period of the loan and for a set period of time.

Capped tracker mortgage is one where the mortgage rate would follow the base rate but with the addition of a cap to prevent it from rising above a set level.

This mortgage allows you to immediately benefit from any drop in interest rates. The fact that your mortgage will not return to the lender's SVR means that your rate will always remain competitive. The disadvantage is that if the interest rates rise then so do your mortgage repayments.