What is a Tracker Mortgage?

A tracker mortgage is a type of adjustable-rate mortgage that has its interest rate tied to the rate of the Bank of England. With this type of mortgage, your interest rate will fluctuate based on the movements of this particular interest rate. The rate will generally be adjusted approximately every 14 days.

This type of adjustable-rate mortgage changes much more frequently than most mortgages of this type. This can be both a blessing and a curse for homeowners with this type of loan. If interest rates in the market go down substantially, you could have a very small mortgage payment for a little while. Then, if the mortgage rates go up in the market, this is going to increase your payment substantially. 

With this type of mortgage, your rate will actually be a little bit higher than what the Bank of England interest rate is at the time. At the same time, your rate will be a bit lower than all of the other adjustable-rate mortgages that are available in the market. This means that you can get a better deal when you sign up for the mortgage, but the payment can change very rapidly. 

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