A mortgage is a loan secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
Elevate is a proven financial services provider and mortgage broker with glowing reviews and stellar endorsements. Our mortgage broker team is based in Bromley and Beckenham, and help clients across London. As part of our mortgage advisory service, we can help individuals and families source and assess tracker mortgages from the whole of the market.
If you need help deciding if a tracker mortgage is for you, or if you want to know the difference between an SVR and a tracker mortgage, we can help. Elevate professionals are experienced, friendly and provide a personalised mortgage advice service to every client!
What Is a Tracker Mortgage?
A tracker mortgage is a type of mortgage tied to the base rate set by the Bank of England. You could pay more or less if the base rate changes. For example, a tracker mortgage will have an interest rate plus the base rate. The interest rate is set by the lender and usually remains fixed for the whole repayment period, while the base rate can change depending on what the Bank of England decides. The base rate has been stable for many years, which adds more stability to a tracker mortgage.
Sound confusing? Don’t worry. Elevate mortgage advice services will analyse different mortgage types to recommend the most advantageous mortgage for your situation. We’ll search the whole of the market to find you the best deal.
The Difference Between an SVR Mortgage and Tracker Mortgage
You might notice some similarities between a Standard Variable Rate (SVR) mortgage and a tracker mortgage. People with an SVR mortgage can also pay more or less depending on the Bank of England’s base rate.
The big difference is that the base rate influences an SVR mortgage, but the mortgage lender has the final say without being allowed to charge more than the base rate. On the other hand, your tracker mortgage lender must increase and decrease the interest rate depending on the base rate.
Tracker Mortgage FAQs
What are rate collars and caps?
Collars and caps are financial terms used to describe the minimum and maximum interest rate charged by a lender.
What is the base rate?
The base rate is the rate of interest that the Bank of England charges banks to borrow money from them. If a bank is paying interest to the Bank of England to borrow money, they pass on this interest to their own customers taking out mortgages.
What is LIBOR based?
The London Interbank Offer Rate (LIBOR) is responsible for setting short-term interest rates. It indicates the average interest rate one bank should be paying to another bank.
Why Use an Advisor to Find the Right Tracker Mortgage?
A tracker mortgage is influenced by outside factors, i.e., the Bank of England’s base rate. Therefore, it can be difficult to understand when a tracker mortgage is right for you. Industry expert mortgage advisors, like our mortgage brokers, can assess the situation and your situation to explain whether a tracker mortgage is right for you. If a tracker mortgage is your best option, mortgage advisors can then search the market for suitable deals, saving you time, stress and possibly money.
Elevate is experienced in searching for the best tracker mortgages in the UK. If you need help to purchase a property in London or further afield, do not hesitate to speak with our trusted mortgage advisors.
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