Mortgages · Tracker
A rate that moves with the Bank of England base rate.
A tracker mortgage sets your interest rate at a fixed margin above (occasionally below) the Bank of England base rate — for example, 'base rate plus 0.75%' — and moves automatically whenever the base rate changes. Your payment can go up or down during the tracker period.
Tracker vs. fixed — the core difference
With a fixed rate, your payment is certain but you don’t benefit if rates fall during the fixed period. With a tracker, your payment moves directly with the Bank of England base rate — if it falls, your payment falls; if it rises, so does your payment, usually within a month of the change. Some tracker deals include a collar, a minimum rate below which it won’t drop further.
Trackers can run for a set period (e.g. 2 years) or, less commonly now, for the life of the mortgage. The right choice depends on your appetite for payment variability and your view — or your adviser’s understanding of market expectations — on where rates are likely headed, though nobody can predict this with certainty.
Who this is for
- Comfortable with payments that can rise or fall
- Expecting interest rates to fall during your term
- Wanting to benefit immediately if rates drop
- Able to absorb higher payments if rates rise
- Comparing against the certainty of a fixed rate
- Considering a lifetime tracker with no fixed end date
How it works
Understand the trade-off
Tracker rates move with the base rate — we'll make sure you understand what that means for your budget in both directions.
Compare against fixed rates
Sometimes trackers start lower than fixed rates, sometimes higher — it depends on market expectations at the time.
Lender and rate matching
Margins above base rate, any collar (minimum rate) and early repayment terms all vary by lender.
Application to completion
Your adviser manages the case through to your new rate starting.
Common questions
- A tracker mortgage sets your interest rate at a fixed margin above the Bank of England base rate — for example, 'base rate plus 0.75%'. When the base rate changes, your interest rate and monthly payment change automatically, usually within one month. Unlike a fixed rate, your payment is not guaranteed to stay the same — it moves up and down with the base rate.
- Yes. Some tracker mortgages include a 'collar' — a minimum interest rate below which the tracker cannot fall, even if the base rate drops significantly. This means you don't necessarily benefit in full from large base rate cuts. Whether a product has a collar and at what level is an important detail to check before taking out a tracker.
- It depends on your financial resilience. A tracker carries rate risk — your payment can rise if the base rate increases. If your budget has limited room to absorb higher payments, the certainty of a fixed rate is usually preferable. If you have more flexibility in your monthly finances and are comfortable with payments that can move, a tracker can work out cheaper if rates fall.
- Whether you can exit mid-deal depends on your specific mortgage terms. Many tracker mortgages have early repayment charges if you leave before the tracker period ends, though some — particularly lifetime trackers — are offered without ERCs, giving you the flexibility to fix at any time. The ERC terms on a tracker are as important as the rate itself when comparing products.
What is a tracker mortgage?
Can a tracker mortgage have a minimum rate?
Is a tracker mortgage more risky than a fixed rate?
Can I switch from a tracker to a fixed rate during the deal?
Reviewed by Yazdaan Hussain · CeMAP qualified · LLB
21 August 2026
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