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UK Mortgage Types

Tracker rate mortgages — more information

There are basically two kinds of underlying mortgage arrangement to any contract:

1. Interest only
2. Principal and interest

Compare UK tracker rate mortgage interest rates online

This page is designed to give the "pros and cons" of the discount rate mortgages . If you want to compare your mortgage, or look at the probabilities for a new mortgage on discounted interest, click here:

Mortgage Calculator

Tracker rate interest arrangements are basically a very complicated version of a variable rate loan,. they are, like variable rate mortgages, an interest repayment variation on a basic "principal and interest" approach.

The interest rate for a fixed period is set at an agreed percentile above the Bank of England base rate, and then tracks that rate up and down. So if the finance news is talking about the bank putting interest rates up from 5.25% to 5.5%, your loan just varied by the same amount of interest.

After an agreed period the rate will revert to the lender's normal rate.

Trackers are like a standard variable and a discounted loan all rolled into one, and as with discounted loans, at the end of the day, you pay.

Pros: Initial repayments are less.(See warning on discounted rates page).

Cons: Most tracker contracts have no let out for the discount period, so you're stuck with their deal for at least that long, and they do not credit payments already made for the purposes of early repayment calculations. Be careful.

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