For the benefits of the British people, a wide choice of mortgages is available while they look out for home loans, both for the first-time purchasers and those thinking about re-financing option. The mortgage lending institutions are keen to attract customers with a variety of plans being offered for consideration, for lending them loans for longer terms of repayment.

As is universally prevalent in the home buying market, the main divisions adopted in the calculation of interest on the loans, to be added with the principal amount in repayment instalments, are only two – a fixed rate of interest throughout the life of the loan, and a fluctuating variable rate of interest according to the financial markets of the country. In UK too, these two main branches of interest calculations are devised and in the fluctuation rate mortgages, many variations have been inducted and offered through financial products under different nomenclature.

Tracker Mortgages belong to the category of fluctuating interests. The interest rate chargeable “tracks down” or linked to the Base Rate announced by the Bank of England periodically. Hence, the Tracker Mortgages depend on the official Base Rate of the Bank of England, and fluctuate accordingly. It goes down when a cut in the interest rate is announced, and goes up when a rise is there on the Base Rate.

For example, if the announced Base Rate is 5%, the lender will add a percentage in accordance with their mortgage products and plans; say 1% and the total interest rate of Tracker Mortgage will be 6%. Here again, discounts are available in plans of Discounted Tracker Mortgages – a half-per cent discount for the first six months means 6% - 0.5% = 5.5% to be charged for six months and then taken back to the original rate of 6% again for the remaining period. Lifetime Tracker Mortgages linked to base rates are also available. The borrower can do well to take the assistance of a mortgage counsellor in choosing the Tracker Mortgage best suited, depending upon their financial background, income capabilities and risk factors involved etc.