SimplyFinance - Tracker Mortgage

How to Find the Best Tracker Mortgage

2007-08-09T23:00:00Z

The tracker mortgage is very similar to a discount mortgage, but the tracker mortgage is much easier to understand. With a discount mortgage a mortgage lender offers the borrower a set percentage off of their Standard Variable Rate. Whereas a tracker mortgage follows the set Bank Rate that is determined by the Bank of England. The tracker mortgage rate will change at a defined margin. For example, if the Bank of England has a set rate of five percent, then a borrower will get a tracker mortgage at the Bank of England rate plus one percent. This means that the borrower has a tracker mortgage rate of six percent.

Lifetime Tracker Mortgages

There are a few lenders that offer borrowers the option of choosing a lifetime tracker mortgage. A lifetime tracker mortgage will track the Bank Rate for the entire duration of the mortgage by a guaranteed maximum percentage. This means that the lender will promise to never charge the borrower more than one percent above the Bank Rate. A lifetime tracker mortgage can be beneficial to the first time buyer that wants assurance that their mortgage rate will not change or go up at an alarming rate. The lifetime tracker mortgage allows a homeowner to know what they are paying each month. A lifetime tracker mortgage comes with a relatively small fee, and there are no ERC’s (early redemption charges) attached to the mortgage. This means that there is not a penalty for early payment of the tracker mortgage.

The Discount Tracker Mortgage

A borrower has the option to choose a discounted tracker mortgage. An example of a discounted tracker mortgage would be that if a lender offered discounted tracker mortgages at Bank Rate minus one percent for six months. Then, after the six month time period, it would revert back to two percent. This means that if the Bank Rate was currently five percent then the homeowner would only have to pay four percent for the first six months and then after this time period six percent for the lifetime of the mortgage.

The Pros and Cons of a Tracker Mortgage

A tracker mortgage is a straightforward mortgage rate. Many people like the tracker mortgage option because the mortgage lender cannot influence the mortgage rate once the margin is set. The homeowner always knows exactly how much their tracker mortgage rate is. Another benefit to choosing a tracker mortgage is that one is able to switch straight out of a tracker mortgage without having to pay an early redemption charge. An early redemption charge is attached to the mortgage amount if the borrower pays the mortgage off early. There is no penalty for early repayment with a tracker mortgage. The only time that an early redemption charge will be attached is during the period of as discount on the tracker mortgage. A third benefit to a tracker mortgage is that this type of mortgage is simple for lenders to design. A tracker mortgage usually comes with lower fees then a capped, fixed or discounted rates mortgage. This is perfect for a borrower who has a set amount of income to work with.

There is only one con to choosing a tracker mortgage. The one negative aspect of a tracker mortgage is that the rate that the borrower pays back fluctuates directly in line with the Bank Rate which is determined by the Bank of England. This is still better then the tracker mortgage rate being attached to the lender’s Standard Variable Rate which can be altered at any time for commercial purposes.

If you'd like to speak with someone about possibly taking out a tracker mortgage, take a moment to fill out this short form. One of SimplyFinance's representatives will consider your information, and they'll introduce you to a tracker mortgage broker that will work with you to answer any questions you might have. Once you're confident that a tracker mortgage is right for you, your broker will help you find the best tracker mortgage deal for you. It's quick, easy, and you're under no obligation to accept the mortgage quote you're given.

CLICK HERE TO APPLY FOR A TRACKER MORTGAGE TODAY!

Tracker Mortgage Basics

2007-08-09T23:00:00Z

When a borrower chooses a tracker mortgage they are essentially choosing a mortgage that has an interest rate that is set at a certain fixed percentage that is either above or below the Bank of England base rate. The tracker mortgage rate differs with each UK lender. If the base rate set by the Bank of England changes, then one month later the tracker mortgage rate that the borrower has will also change to match the base rate. A tracker mortgage tends to offer a lower rate in comparison with a flexible or fixed rate mortgage. The tracker mortgage benefits from the fluctuation of the current conditions of the economy.

Often times a tracker mortgage will seem like the cheapest option when a borrower is taking a loan out. The borrower must be made aware that the tracker mortgage rate can rise heavily during the course of the term of the loan. Remember that when the Bank of England changes the base rate, the interest rate of the tracker mortgage also changes. On the other hand, the tracker mortgage rate can be reduced if the base rate goes down. As a borrower, if the tracker mortgage sounds like the perfect option then it is best to shop around to find the cheapest quotes. There are several online resources that a borrower can take advantage of in order to find the best deal on a tracker mortgage.

Tracker mortgages are becoming hugely popular because they are easy to understand. To put it quite simply, a tracker mortgage tracks the Bank of England base rate. The borrower’s tracker mortgage rate goes up or down in conjunction with the rate changes of the Bank of England. Since the tracker mortgage has become so popular amongst borrowers, there are hundreds of tracker mortgage offers to choose form. This can make choosing the best tracker mortgage difficult. There are some terrific discount mortgage tracker deals on the market but one must know where to start looking.

If searching through hundreds of mortgage quotes doesn't sound like a way you want to be spending your time, let SimplyFinance do the searching for you. Take a moment to fill out a short form for us, and one of our representatives will put you in touch with the best tracker rate mortgage lender for your particular circumstances. This lender will be able to answer any and all tracker rate mortgage questions you may have, and once you're sure it's the right type of mortgage for you, the lender will do their best to find the best tracker rate mortgage deal for you.

CLICK HERE TO APPLY FOR A TRACKER MORTGAGE TODAY!

Money Saving Potential in Tracker Mortgages

2008-01-08T00:00:00Z

One very underused resource in the mortgage industry is the tracker mortgage or rate tracker mortgage. Due to a general lack of knowledge about tracker mortgages, borrowers tend to go for fixed rate or variable rate mortgages. However, with the uncertainty surrounding interest rates in today's economy, a tracker mortgage may be a good choice for many potential mortgage customers who are concerned with being trapped in a high fixed rate mortgage.

Tracker mortgages or rate tracker mortgages are an alternative to fixed rate mortgages. It's called a tracker mortgage because your interest rate will "track" the Bank of England's base rate.

With a tracker mortgage, the interest rate is anchored to the BoE's base rate, and your lender will fix your rate at a percentage above the base rate for a period of 2-10 years, or in some cases, it will be a tracker for the entire term of the mortgage. Because your rate is linked to the base rate, whenever the base rate moves up, down, or remains unchanged, yours will do the same.

The advantage of a tracker mortgage is that you are not tied into a single interest rate for the entire term of the mortgage. This means that your interest rate will be able to move up and down along with the base rate. This is unlike a fixed rate mortgage in which you will have the advantage if you've got a fixed rate that is lower than the current base rate, but if the base rate dips below your fixed rate, you'll lose money.

Tracker rate mortgage rates are revised on a monthly basis. The BoE Monetary Policy Committee meets each month to weigh factors such as inflation, the housing market, consumer debt, and consumer spending. Once they consider these factors, they decide whether the base rate needs to be increased, decreased, or whether it's best left unchanged.

While interest rates should be an exceedingly important part of you of which type of mortgage to go for, it is not the only thing that you need to consider. While having the right type of interest rate can save you a lot of money, if you don't pay attention to factors like application fees, valuation fees, early termination penalties, and loan flexibility, your are likely to lose a lot of money. All of these different facets of a mortgage are dependent on the lender you choose to work with.

If you think a tracker mortgage is the right type of mortgage for you, take a moment to fill out a short informational form, and a SimplyFinance representative will contact you soon to discuss your tracker mortgage options. We'll introduce you to the best tracker mortgage lender for your specific financial goals and needs.