Lifetime tracker mortgage explained, imminent rate rise

You only need to travel back a few months and you could’ve seen people telling you they had a mortgage rate of 0.9%, which at first seems amazing but can be understood when you think about tracker mortgages.

Only a couple of years ago some home owners took a loan for their home that tracked the Bank of England base rate very closely, and once this dropped to 0.5%, they had one great deal. Today you will not find any such deal, as banks are not so generous.

Another option is the lifetime tracker mortgage that is explained in an article on woolwich.co.uk, their rate is variable and will fall and rise with changes to the Barclays Bank base rate. This is a popular type of variable rate mortgage, although it carries an element of chance, as you could safe money if mortgage rates go down (BBBR in this case) or you could pay more if they increase.

Another benefit is no early repayment charges, which can catch some people out on a fixed rate.

In the latest news, Mortgage lenders are cutting rates and offering some better deals, which is due to an imminent rise in the base rate for the BoE. You can read more on how lenders are trying to attract homeowners and first-time buyers in this article.

The quick video below explains tracker mortgages in a simple way. How fast do you expect the base rate to rise over the next one to two years?