What Is A Tracker Variable Rate Mortgage?
Shopping for a mortgage can feel at times like you’re trapped in a maze: there are so many routes you could take, but which one is correct?
The answer to this of course depends on your personal circumstances, preferences and financial goals. With mortgages, it’s certainly not the case that one size fits all – a mortgage which is perfect for one individual may be a millstone around the neck of another.
Tracker variable rate mortgages are just one of the options available to you – and have been popular in recent years. Why is that?
The pros and cons
With a tracker mortgage, your interest rate is tied to the Bank of England’s base rate, which in recent years has reached historic lows. This has been great for those on tracker mortgage deals, as their monthly repayments have been particularly affordable.
But a tracker mortgage’s biggest pro can also be its biggest con; if interest rates rise significantly over a short period of time (which has happened before), your monthly payments will follow suit. Depending on how tightly you’ve budgeted, this may leave you with little to no money at the end of the month – a scary prospect.
So, yes, you could save a considerable amount of money by opting for a tracker mortgage as opposed to a fixed-rate mortgage, but you won’t be able to enjoy the latter option’s consistency. A tracker mortgage is always a riskier option, as there’s no way of predicting with complete certainty which way interest rates will go in the future. If they remain low, however, it’s a risk which could pay off for you.
Tracker mortgage deals typically last for two, three or five years, but lifetime trackers do exist too.
Tracker mortgages Northampton
Are you looking into choosing a tracker mortgage, but can’t decide for certain whether it’s the right option for you? Or perhaps you’ve got your heart set on one, but would like a helping hand to find a deal which ticks all of your boxes and suits your personal circumstances to a tee?
Whichever category you fall into, you can count on Derngate Wealth Management to provide honest, transparent and easy to understand advice on tracker mortgages. And as we have access to a whole host of lenders, we can find a tracker plan which is ideal for you. Contact us today to find out more and schedule a free initial consultation.