The key differences between a fixed rate and tracker mortgage.

As mortgage rates plummeted last year, many lenders introduced new, competitively priced product ranges. This means an eye-watering number of mortgages are available today, making the property purchaser’s job of finding the right mortgage, even more difficult than it was.

In addition to the number of mortgages on offer, are the types of mortgage. Which one should you choose?

That depends entirely on your individual circumstances, but briefly, the following are the main differences of note between a fixed rate mortgage and a tracker.

The main benefit of a fixed rate mortgage, which stays the same during the term, is stability. Paying the same amount every month can bring certainty to your finances. In the case of a rise in interest rates, you are protected for the term of the fix, however, if the interest rate falls, you won’t benefit as your repayments will remain unchanged.

The interest rate payable with a tracker mortgage, is linked to the BoE base rate. This mortgage tracks any changes in the base rate and your rate would rise, or fall, in line with any movelment. The main benefit of a tracker is that the rate of interest, generally speaking, is lower than a fixed rate. It is imperative, though, that affordability at a higher rate of interest is taken into account before you apply for one of these mortgages.

Choosing the wrong type of mortgage for your circumstances could be costly. To make certain you to make an informed decision, consulting with independent mortgage broker, Deal Direct, is a must.

Speak to one of our professional mortgage experts on 0800 048 8828 now.