How Long Does a Tracker Mortgage Last?
Tracker mortgages have proven popular in recent years. Why? With this type of mortgage, your interest rates are based on the Bank of England’s base interest rate, which lately has reached historic lows.
If you’re considering choosing a tracker mortgage or switching to one, you may be wondering how long they last.
The answer to this question isn’t so simple, because tracker mortgages vary in length considerably depending on the lender and which deal you choose.
Typically, they last for between two and five years, though there are lenders out there offering lifetime tracker mortgages. This means that your mortgage will follow the Bank of England’s base rate permanently – a potential money saver or considerable risk, depending on how you look at it.
One benefit to those mortgages, however, is that you can often leave them without incurring a penalty. So, if interest rates do rise, you’ll have a way out. This seriously reduces the risk of getting caught out by a sharp rise in interest rates.
Interest rates are unlikely to remain this low forever, so short-term tracker mortgages are much more popular. They do, however, lock you in for two to five years, meaning you’ll have to pay a penalty if you want to remortgage.
Tracker Mortgages Northampton
A tracker mortgage may be the perfect fit for you, but it does make it harder to budget accurately each month. At Derngate Wealth Management, we can advise you appropriately and help you decide which mortgage type to go for.