Gazette Articals
Tracker Mortage
In the previous issue we looked at the Fixed rate Mortgage. This issue we shall look at the Tracker.
What is a tracker mortgage? Basically it is a discounted mortgage that unlike the fixed rate which will remain at a pre determined rate for a set period, will ‘track’ the base rate in the same way that a standard variable rate would do, but at a discounted rate for a pre determined period.
As with the fixed rate there will be arrangement fees involved in setting up the plan to begin with, and early repayment charges (ERC’S) involved in leaving the plan earlier than the end of the discounted period. As with most mortgage plans it is worth checking that the mortgage is portable. This will be particularly important should you have any intention of moving within the discounted period, as you may want to take the mortgage with you and not pay all the costs involved in setting up a new plan again.
Many people will have benefited greatly recently from having a tracker mortgage with the base rate being at such a low rate. The question to ask yourselves now is ‘should I be taking a fixed rate?’ Many of the long term fixed rates are already beginning to move up, as I suspect that most lenders will be anticipating a rush of mortgagees wanting to move from a tracker to a long term fixed rate before the base rate starts moving up too far.
As we mentioned in last issues article, it is vitally important that you sit down and consider the sums involved in changing your mortgage, as you could easily end up spending more in fees than you will save by changing mortgage.