Tracker mortgages: should you get one?

by Aaron Strutt

Aug 02 2023

Not long ago, many of the larger banks and building societies were not offering tracker rate mortgages, but there is now a large selection of lenders providing them.

Halifax, for example, is offering tracker mortgages for the first time in four years. While Barclays for Intermediaries has a tracker as low as 0.14% over the current 5% base rate. HSBC for Intermediaries and Nationwide Building Society are some lenders offering the most competitively priced tracker rates.

More lenders have been lowering their fixed rates but they have not come down a huge amount. Many borrowers are taking a shorter-term view to refinance in a few years. Huge numbers of homeowners want, and often need, rates to be more manageable soon.

Many tracker rates currently undercut fixed mortgages

There is quite a significant difference between the rates on two-year fixes and two-year trackers, especially if you have a chunky mortgage.  

Borrowers understand there are risks when opting for a variable mortgage. Still, many think that given the upheaval recent rate rises have caused, the Bank of England's Monetary Policy Committee will not vote for many more base rate rises.

Tracker rate mortgages are not for everyone

Tracker rates are not for everyone, many people like the financial security a fixed rate provides, particularly after the mortgage market chaos we have seen over the last year.

Tracker rates are generally taken by people who prefer to take more risk and often have funds to cover the additional payments charged if and when the base rate rises.

Consider taking a tracker rate mortgage without early repayment changes

Many lenders provide base rate trackers without early repayment charges or with the option to switch to a fix if rates get too high. This means they can have more control and fix if needed. Others want to avoid the standard two or five-year fixed rate cycle because they think they will be able to get a better deal in the near future. 

Not all lenders offer their customers flexible products without tie-ins when their deals end. This means borrowers either need to remortgage to another lender with a greater product choice or revert to the expensive standard variable rates.  

Homeowners need flexible mortgages without tie-ins for a host of reasons, especially if they are planning to sell up or they are separating from their partner. 

Do lenders still offer term tracker mortgages?

Trinity Financial still has access to lenders offering Bank of England base rate term tracker deals, but not many high street lenders offer them.

Many banks and building societies used to offer lifetime tracker rates, but they don't anymore. They have learnt after issuing so many mortgages that tracked the base rate by a tiny margin. They want to cover themselves if the base rate drops to nothing again.

Call Trinity Financial on 020 7016 0790 to secure a mortgage or book a consultation 

The information contained within was correct at the time of publication but is subject to change.

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