What is a tracker mortgage?

A tracker mortgage is a mortgage where the interest rate usually follows, or tracks, the base rate set by the Bank of England.

It’s important to note it’s unlikely you’ll get the exact base rate; lenders will often offer a mortgage set at a percent or two higher than the base rate and may have a cap on how low the interest rate can get.

Because the rate is variable, you could benefit from cheaper payments when the rate is low but could also risk higher payments when the rate raises. It’s also worth mentioning that arrangement fees tend to be lower for this type of mortgage as opposed to fixed-rate mortgages.