| When interest rates are low or the housing market is | | | | arrangement. This means that you then have piece of |
| struggling, it's not a bad idea to get a 2 year tracker | | | | mind knowing that your monthly repayment will stay |
| mortgage. If you're the kind of person that likes to get | | | | the same and you can budget accordingly. |
| a good deal but doesn't want to gamble on your | | | | The second option is to take on a short term tracker |
| family's financial future, then this is the type of | | | | mortgage, so even if your repayments do begin to |
| arrangement that will suit you best. | | | | increase you'll only have to deal with them for a short |
| For those that don't know, a tracker mortgage is | | | | period of time. If you've done your homework and |
| where the interest you pay on your loan goes up and | | | | understand the market, then you should be able to get |
| down depending on interest rates. For example, a | | | | in and out with your tracker mortgage and make |
| mortgage provider might have a deal that offers you | | | | some good savings along the way. |
| the rate of 1% above the Bank of England base rate. | | | | A 2 year tracker mortgage is the most popular length |
| So if the base rate is at 5% you'll pay 6% interest. | | | | of time for people new to the arrangement. The best |
| Then if the rate falls to 4.5% you'll pay 5.5% in interest. | | | | time to get hold of this type of product is just before |
| The same unfortunately applies if the base rate | | | | interest rates are set to fall. If you can pin a provider |
| increases. That tiny shift in percentages can | | | | down to giving you a good deal, whilst safe in the |
| dramatically reduce or increase your monthly | | | | knowledge it might get even better, then you know |
| repayment which is why tracker mortgages are | | | | you've done good business. |
| considered a gamble. | | | | Tracker mortgages do represent a gamble so only |
| There are two ways to take away some of the | | | | enter into them if you're entirely sure you know what |
| gamble associated with tracker mortgages. The first is | | | | you're doing and are aware of the consequences |
| to make sure you have an exit option available with | | | | associated with them. Make sure to consult an expert |
| the loan. Some providers will allow you to switch your | | | | mortgage broker for advice before committing to any |
| tracker mortgage to a fixed rate deal during the | | | | deal. |