Variable Rate Mortgages - Tracker Mortgages | moneyfacts.co.uk

Compare the Best Variable Rate & Tracker Mortgages

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Compare the Best Variable Rate & Tracker Mortgages

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RateAPRCTrackerPeriodMax LTVERCSearch all
5000 mortgages

1.74%
 for Term
1.9% NoTerm65%NoneDetails...
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  Product Fee: Arrangement £999 

1.80%
 for Term
1.9% NoTerm75%NoneDetails...
Speak to an Adviser
 
  Product Fee: Arrangement £999 

2.00%
 for Term
2.1% NoTerm85%NoneDetails...
Speak to an Adviser
 
  Product Fee: Arrangement £999 

2.20%
 for Term
2.3% NoTerm75%NoneDetails...
Speak to an Adviser
 
  Product Fee: Arrangement £499 

2.40%
 for Term
2.0% NoTerm85%NoneDetails...
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  Product Fee: Arrangement £499 

2.70%
 for Term
2.8% NoTerm90%NoneDetails...
Speak to an Adviser
 
  Product Fee: Arrangement £999 
  Sponsored Products  

2.69%
Reverting to 3.99%
3.8% Yes31/07/202070%To 31/07/2020Details...
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  Product Fee: None 

4.49%
 for Term
4.6% YesTerm90%NoneDetails...
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  Product Fee: None 

2.49%
 for Term
2.6% YesTerm75%NoneDetails...
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  Product Fee: Booking £490 

1.29%
Reverting to 3.94%
3.6% Yes2 years70%NoneDetails...
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  Product Fee: Booking £899 

2.69%
Reverting to 3.99%
3.9% Yes31/07/202070%To 31/07/2020Details...
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  Product Fee: None 

1.65%
Reverting to 4.79%
4.3% Yes01/07/202070%To 01/07/2020Details...
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  Product Fee: Arrangement £995 

Representative Example: £150,000 mortgage over 25 years initially at 2.20% variable for term. 300 monthly payments of £650.49. Total amount payable £195,696.00 includes loan amount, interest of £45,147, valuation fees of £0 and product fees of £499. The overall cost for comparison is 2.3% APRC representative.

Moneyfacts.co.uk Best Buys show the best products chosen by our independent experts. Where we have been able to we have also provided a link for you to apply via Moneyfacts.co.uk today. Products shown with a yellow background are sponsored products.

Disclaimer: Credit will be secured by a mortgage on your property. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. Written quotations are available from individual lenders. Loans are subject to status and valuation and are not available to persons under the age of 18. All rates are subject to change without notice. Please check all rates and terms with your lender or financial adviser before undertaking any borrowing.

 

On this page:

  1. What is a variable rate mortgage?
  2. What are the different types of variable rate mortgage?
  3. How do variable rate mortgages work?
  4. Why consider a variable rate mortgage?
  5. How long do variable rate mortgages last?
  6. Who are variable rate mortgages for?

What is a variable rate mortgage?

There are several types of variable rate mortgages, including standard variable, discounted rate and tracker rate. The interest rate you pay variable rate mortgages can go up and down in line with the Bank of England base rate. Although they do not offer protection from future rate increases, they will allow you to benefit from cheaper payments when interest rates are low.


What are the different types of variable rate mortgage?

Tracker Mortgages

These rates move up and down (or track) in line with changes to the Bank of England base rate, meaning that your payment can fluctuate as well.

Standard Variable Rate Mortgages (SVR)

Most lenders offer a standard variable rate mortgage (SVR). The fees associated with taking out, or remortgaging from, an SVR mortgage are often relatively low. This is because many have low set-up costs and no early repayment charges. Unlike a tracker, an SVR is set arbitrarily by each individual lender, so your rate may increase or decrease by a different amount to the Bank of England base rate.

Discounted variable rate mortgages

Discounted variable mortgages are another form of variable rate mortgage where the lender offers a discount on a certain rate, most commonly the lenders standard variable rate, in the form of an introductory term. For more information, we have a separate best buy table for discounted variable mortgages.


How do variable rate mortgages work?

Variable rate mortgages nearly always track the Bank of England vase rate. Whether the mortgage rate is set at a margin above or below base rate will depend on the provider.

Base is currently 0.25%, so if you see a mortgage advertised at, for example, 2.25% plus base rate, your actual rate will be 2.5% for as long as base rate remains at 2.25%. If base rate were to hypothetically increase to 0.5% your mortgage rate would increase to 2.75%. Or if base rate falls to 0.15%, your mortgage rate would be 2.4%.

As always, your home may be repossessed if you do not keep up repayments so you must be sure that you would be able to afford your mortgage if base rate goes up. If there’s a chance that you can’t afford it, a tracker mortgage may not be the best option for you. Try looking at fixed rate mortgages instead.


Why consider a variable rate mortgage?

Because variable rate mortgages depend on the base rate set by the Bank of England, you can potentially end up paying less than you would have with a fixed rate mortgage for as long as base rate remains low. Conversely, when interest rates inevitably go up, so will your mortgage rate. There are a lot of variable here, but you may end up paying more than if you’d locked in to a fixed rate mortgage.


How long do variable rate mortgages last?

Unlike fixed rate mortgages, your variable rate mortgage will have the capability of changing throughout the term of your mortgage. With this in mind, it’s important to consider whether you will be able to afford a variable mortgage in 20 years’ time without knowing what rate you’ll be paying.

An exception to this rule is discounted variable rate mortgages, which offer an introductory discount similar to a fixed rate mortgage, but the introductory rate is still variable (IE can increase and decrease with base rate) but at a reduced rate from the standard variable rate. For more information on discounted variable rate mortgages, read our tracker mortgage guide.


Who are variable rate mortgages for?

The rule of thumb here is that variable rate mortgages are only for those who are confident in their ability to repay their mortgage even if their mortgage rate goes up. Variable mortgages frequently offer competitive rates, especially in the form of an introductory offer. Taking advantage of these rates could save you a lot of money on your total mortgage repayments, but you must always consider that your mortgage rate could end up a lot higher once rates rise.


What next?

Compare discounted variable rate mortgages

Compare first time buyer mortgages

Compare fixed rate mortgages

Search all mortgages

 

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