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Considering a tracker mortgage instead of locking into a fix? We explain how tracker mortgages work, the pros and cons, whether a tracker mortgage is a good idea in 2026, and how to get the best tracker mortgage rate for you.
KEY INFORMATION
A tracker mortgage is a type of variable rate mortgage that “tracks” a base rate, usually the Bank of England’s base rate. So if interest rates increase or decrease, the rate you’ll pay on your mortgage will go up or down by the same amount.
When you take out a tracker mortgage, your deal will track a certain amount above the base rate. For example:
Tracker mortgages, and other types of variable rate mortgages, work differently to a fixed rate mortgage, where you’ll pay the same rate for the initial term, usually 2, 3 or 5 years.
The best mortgage depends on your personal circumstances. The award-winning expert advisers at Mortgage Advice Bureau will find the right mortgage for you.
Get fee-free mortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
Your home may be repossessed if you do not keep up repayments on your mortgage. Please note some branches of Mortgage Advice Bureau may charge a fee for mortgage advice if you go direct. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed. So make sure you use this site, this form or phone number for fee-free advice.
There are around 591,000 households on tracker mortgages, according to UK Finance figures published in May 2025. By comparison, UK Finance reported that there were around 7.1 million households on fixed rate mortgages.
In October 2026, more borrowers are considering tracker mortgages, following increases in fixed mortgage rates, the FT reports.
Tracker mortgages are a type of variable rate mortgage. Here’s how they compare to discounted mortgages and standard variable rate mortgages (both also variable rate mortgages) and fixed rate mortgages.
| Type of mortgage | How it works |
|---|---|
| Tracker mortgage | The rate you’ll pay will go up and down in line with the base rate. So if the Bank of England cuts interest rates, your mortgage payments will usually go down. But if it hikes interest rates, your mortgage payments will usually go up. |
| Discounted variable rate mortgages | Discounted variable rate mortgages are set below the lender’s standard variable rate. So your rate may go up or down, depending on any changes the lender makes to its standard variable rate. |
| Standard variable rate | Your lender sets the amount you pay. These mortgages can be very expensive. |
| Fixed rate mortgage | You’ll pay a fixed rate during your initial term, usually 2-5 years. So you won’t pay more on your monthly mortgage payments if interest rates increase, but you won’t pay less if they fall either. |
This depends on the tracker mortgage deal you choose. Some will charge you an ‘early repayment charge’ if you want to repay the mortgage or switch to a different deal during the initial term. Read our guide Early repayment charges and how to avoid them.
But not all tracker mortgages come with early repayment charges, so you may want to consider this when you’re taking out your mortgage.
Considering a tracker mortgage? Here are the pros and cons to weigh up when deciding what is the best mortgage for you.
If the Bank of England reduces interest rates, the rate you’ll pay on your mortgage each month will go down too.
Some tracker mortgages come with no early repayment charges which means you can remortgage early to switch to a better deal without paying a penalty.
Most tracker mortgages are linked to the Bank of England base rate so the amount you’ll pay on your mortgage will go up or down in line with that. By comparison, with a discounted variable rate mortgage, the rate you’ll pay will depend on the standard variable rate your lender sets.
Some tracker mortgages have a cap that limits the rate of interest you could be charged. Although you may pay a higher mortgage rate on these deals.
If interest rates increase during your mortgage deal, so will your mortgage payments.
If your tracker has a collar, which means there’s a limit on how low the rate you’ll pay can go, you won’t feel the benefit of interest rate cuts if they hit a certain level.
Get fee-free mortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
Your home may be repossessed if you do not keep up repayments on your mortgage. Please note some branches of Mortgage Advice Bureau may charge a fee for mortgage advice if you go direct. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed. So make sure you use this site, this form or phone number for fee-free advice.
A tracker mortgage could be worth considering if you think interest rates will fall and you can afford higher repayments if they rise instead.
Our Mortgage Expert Sarah Tucker says: “Tracker mortgages can be an attractive option because if the Bank of England cuts interest rates, your mortgage payments could fall too. But conversely, if interest rates go up, so will your mortgage payments.
“So before choosing a tracker, ask yourself whether you could comfortably afford the repayments if rates increase.
“If you’re looking at trackers, it’s also worth looking at those with no early repayment charges, as these can give you greater flexibility to switch deals if your circumstances change or a better option becomes available.”
However, whether a tracker mortgage is a good idea for you will depend on your circumstances, the rates available and how much certainty you want over your monthly mortgage repayments. It’s a good idea to get expert advice from a mortgage broker.
The lowest tracker mortgage rates are typically available to borrowers with larger deposits or more equity in their homes. When comparing deals, you’ll also need to consider arrangement fees and any early repayment charges.
In October 2026, some of the lowest tracker mortgage rates include:
However, the best mortgage rates can change quickly. Also, the best mortgage depends on your personal circumstances. The award-winning expert advisers at Mortgage Advice Bureau will find the right mortgage for you.
This table illustrates how much these mortgages will cost you each month in the initial term if you take out a £200,000 mortgage over 30 years. The monthly payment amount is based on the rate only and does not take into account any fees. Also, with tracker mortgages, your monthly mortgage payments can go up and down.
| Mortgage type | Mortgage deal & rate | Monthly mortgage payment |
|---|---|---|
| Best 5 year tracker mortgage | Barclays’ 4.35% (Base+0.6%) Max LTV 60%. Fees £1,104. | £1,000 |
| Best 5 year fixed rate mortgage | Halifax’s 4.82%. Max LTV 60%. Fees £1,099. | £1,056 |
As the amount you’ll pay is linked to the base rate, here’s how much you’ll pay on Barclays’ base + 0.6% mortgage if interest rates change from the current rate of 3.75%.
| Bank of England Base Rate | Rate you’ll pay (Base + 0.6%) | Monthly mortgage payment |
| 3.5% | 4.1% | £966 |
| 3.25% | 3.85% | £938 |
Here’s how your repayments would change if interest rates increase from the current level of 3.75%.
| Bank of England Base Rate | Rate you’ll pay (Base + 0.6%) | Monthly mortgage payment |
| 4% | 4.6% | £1,025 |
| 4.25% | 4.85% | £1,055 |
A tracker mortgage may be worth considering if you can afford higher repayments and want to benefit if interest rates fall. A fixed rate mortgage may suit you better if you want certainty over your monthly repayments, particularly if your budget is tight.
When it comes to your mortgage you need to consider what’s best for your individual circumstances. So speak to a fee-free broker so they can explain your options and find the right mortgage for you.
Use this mortgage cost calculator to get an idea of what your monthly mortgage costs are likely to be. You can also use it to see how your mortgage costs will change if interest rates increase or decrease.
Tracker mortgages are widely available at major mortgage lenders including:
Get fee-free mortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
The easiest way to compare current tracker mortgage rates and find the best mortgage for you is to speak to an expert mortgage broker.
Here’s the step-by-step process of how to get a tracker mortgage.
Start by shopping around to find the best mortgage for you. Speaking to a mortgage broker is the quickest and easiest way to do this.
Your next step is to get a Mortgage in Principle (sometimes called an agreement or decision in principle). This is a statement from a lender on how much they would lend you ‘in principle’ based on information you have provided about your income and outgoings.
Once you’ve chosen your mortgage deal, it’s time to start the formal mortgage application process. Your mortgage broker can take this forward for you.
Get fee-free mortgage advice from the award-winning expert advisers at Mortgage Advice Bureau.
Your home may be repossessed if you do not keep up repayments on your mortgage. Please note some branches of Mortgage Advice Bureau may charge a fee for mortgage advice if you go direct. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed. So make sure you use this site, this form or phone number for fee-free advice.
Here at the HomeOwners Alliance, we have compiled the best mortgage lenders, based on how competitive their mortgage rates have been in recent months, as well as the size of the lender based on figures from UK Finance, and popularity with our readers. Find more in our guide to the best mortgage lenders.
However, our reviews are our opinion and do not constitute advice, recommendation or suitability for your financial circumstances.
The best mortgage depends on your individual circumstances. The award-winning expert advisers at Mortgage Advice Bureau will find the right mortgage for you.
Your tracker mortgage rate will change if the Bank of England decides to increase or cut interest rates. These decisions are made by the bank’s Monetary Policy Committee at set dates throughout the year. If the Bank decides to hold the base rate, your mortgage interest rate will stay the same.
Yes, first time buyers can take out trackers as long as they meet the lender’s lending criteria. However, make sure you would be able to afford the repayments if your mortgage payments increase. Find out more in our guide to First Time Buyer Mortgages
If you can afford to pay off a tracker mortgage early, you will cut the amount of interest you pay. But it’s important to check whether your tracker deal comes with an early repayment charge if you pay it off early. Find more information in our guide Should I pay off my mortgage?
Ultimately, whether or not it’s worth paying off your tracker early will depend on your circumstances so it’s a good idea to get expert mortgage advice.
Some tracker mortgages allow you to switch to a different mortgage within your initial term without needing to pay fees like an early repayment charge. However, with some mortgage deals you will face fees if you want to switch to a new mortgage before your current deal ends. So check the terms of your mortgage deal or speak to your mortgage broker.
Tracker mortgages typically track above the Bank of England base rate which means if interest rates increase or fall, you’ll automatically pay more or less on your mortgage. But a discounted variable is linked to the lender’s Standard Variable Rate. If the lender decides to increase or decrease its SVR, you’ll pay more or less on your mortgage.
Whether or not you’ll be able to overpay on your tracker mortgage will depend on your deal. Most mortgage deals let you overpay by 10% each year without needing to pay an early repayment charge, while some let you overpay by more. However, some lenders offer tracker deals that have no early repayment charges so you may be able to make unlimited overpayments without a penalty, depending on the terms of your deal.
Most tracker mortgages are linked to the Bank of England base rate. However, this is not always the case. For example, NatWest says its tracker mortgages follow the ‘National Westminster Bank Plc Base Rate which is influenced by the Bank of England base rate’. This base rate is currently the same level as the Bank of England’s base rate.
A tracker mortgage rate is a variable interest rate that usually changes in line with the Bank of England’s base rate. As a result, your monthly mortgage payments can go up or down as the base rate changes.
The standard variable rate (SVR) is the interest rate that you will usually be charged once the initial deal period of your fixed, tracker or discount mortgage ends unless you remortgage onto a new deal. With an SVR mortgage, the amount that you pay can change at any time. Find out more in our guide Should you ditch your Standard Variable Rate mortgage?
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