Bad credit? We’ve got your back. We’re the experts who turn “no” into “home”. Explore everything you need to make homeownership happen, regardless of your credit history.
View allSelf-employed? No problem. We’re specialists in making mortgages work for you. Here’s everything you need to tackle the mortgage maze, without the usual hassle.
View allGot a unique situation? We’ve got you covered. As specialist mortgage experts, we cut through the noise to get you what you need. Find your path to homeownership here.
View allRemortgaging doesn’t have to be a headache. We’re the experts who get it done. Find straightforward advice to remortgage with confidence, no matter your circumstances.
View allYour go-to hub for all the other need-to-know mortgage information. From guides to FAQs, we’ve got the answers, no matter your situation.
View allGetting a Joint Mortgage When One Applicant Has Bad Credit
Our Blog
We take a closer look at why tracker mortgages could be a good option right now.
No impact on your credit score
Author: Michael Whitehead Head of Content
4 mins
Updated: Nov 29 2024
Author: Michael Whitehead Head of Content
4 mins
Updated: Nov 29 2024
Please be aware that by following any external links you are leaving the Haysto website. Please note Haysto nor HL Partnership Limited are responsible for the accuracy of the information contained within external websites accessible from this page.
On this page
In a widely expected move, the Bank of England reduced its base interest rate from 5% to 4.75%* for just the second time this year following the latest meeting of its Monetary Policy Committee (MPC) on November 7th.
*Source: Bank Of England
While the Bank’s policy lately has been to keep its base rate stable in the ongoing battle with inflation, its governor, Andrew Bailey, has suggested that rates may fall gradually from here.
This will be welcome news for anyone with a mortgage, particularly those looking to move in the near future or remortgage an existing deal that is reaching the end of its term. It also presents an opportunity to explore tracker mortgages, most of which have a direct link to the base rate.
Here's why tracker mortgages might now be an appealing option compared to the fixed-rate alternatives.
A tracker mortgage rate ‘tracks’ the Bank of England's base rate movements, usually with a set margin between the two. For example, if that margin is ‘base+0.5%’, the interest rate on a tracker mortgage right now would be 5.25%. If the base rate were to fall following the next MPC meeting by 0.25%, the tracker rate would then be 5% and so on.
With the recent rate cut, anyone with a tracker mortgage will have immediately felt the benefit on their next repayment. Cuts to the base rate mean that the interest you pay on a tracker mortgage also decreases straight away.
Most market analysts predict that the Bank of England may implement additional rate cuts over the next twelve months. Should this happen, anyone with a tracker would benefit directly, as their rates would also decrease in line with the base rate. Fixed-rate mortgage holders, by contrast, would remain locked into their agreed rates, missing out on potential savings.
Tracker mortgages often come with shorter tie-in periods or no early repayment charges, offering more flexibility for those who anticipate moving or repaying their loan earlier than expected.
While tracker mortgages can offer immediate advantages when rates are falling, fixed-rate mortgages remain popular for those who prefer stability. A fixed-rate mortgage locks in an interest rate for a set term, typically two, five, or even ten years. This guarantees your monthly repayments and shields you from any future rate increases.
If the Bank of England raises rates, tracker mortgage holders could face higher monthly payments. Fixed-rate mortgages eliminate this risk, providing peace of mind to borrowers with tighter budgets or long-term financial commitments.
The decision ultimately depends on your financial circumstances and risk tolerance:
Believe the base rate will continue to fall and remain low.
Want to take advantage of immediate cost savings.
Value flexibility and might repay your mortgage early.
Prefer to know exactly how much your mortgage repayments will be each month.
Are concerned about the possibility of rising interest rates.
Plan to stay in your home in the long term and don’t want to worry about rate fluctuations.
In light of the Bank of England's base-rate cut, tracker mortgages present a compelling opportunity to benefit from lower repayments and further rate reductions. However, they also come with the risk of rate increases, making them more suitable for those with financial flexibility. Fixed-rate mortgages, on the other hand, remain a solid choice for borrowers seeking long-term security.
Before committing to any specific mortgage type, it’s important to consider your overall financial situation, where you might see yourself living in the future, and how much risk you’re willing to take with your mortgage repayments. This is where we can help!
Our mortgage team can help you reach your decision by outlining all the pros and cons of each type of mortgage in more detail so you can make a fully informed choice. Once you’ve done that, they’ll work on your behalf to find the most competitive mortgage deal that perfectly suits your situation.
Just make an enquiry, and one of our Mortgage Experts will contact you to discuss your options.
Let's Get Started
We Make Mortgages Possible
Our Mortgage Experts are fully qualified with experience in bad credit, self-employed and complex mortgages. They have a proven track record of getting mortgages for people who’ve been rejected elsewhere.
Get Started Now Get Started NowWe make mortgages possible. Bad credit? Self-employed? Complex situation? No problem. You’re in the right place. We get it, and we can help.
Try it FREE for 30 days, then £14.99 a month - cancel online anytime.
Information
Tools & Guides
Haysto Ltd is an appointed representative of HL Partnership Limited which is authorised and regulated by the Financial Conduct Authority. Registered Office: Haysto, Crystal House, 24 Cattle Market Street, Norwich, NR1 3DY. Registered in England and Wales No. 12527065
The guidance and/or information contained within this website is subject to the UK regulatory regime and is therefore targeted at consumers based in the UK.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Talk to our Mortgage Experts to find out your options