Tracker and variable mortgages

A tracker mortgage is a variable rate loan whose interest rate follows the Bank of England base rate plus a set margin. When the base rate changes, the mortgage rate moves by the same amount, usually from the next month. Its margin is fixed for the tracker period, which may be two years, five years or the whole term.

Tracker mortgages are still widely offered in the UK, on both purchases and remortgages. Some have a collar, a minimum rate the mortgage will not fall below even if the base rate drops further, which is set out in the offer.

The difference between a fixed and a tracker mortgage is who carries the risk of rate changes. A fixed rate keeps the payment the same for the fixed period, whatever happens to the base rate. A tracker passes changes straight through, so payments fall when the base rate falls and rise when it rises.

The choice usually comes down to how much a payment rise would hurt the household budget, and how flexible the borrower needs the deal to be. Trackers can suit those who expect to move or repay soon, or who can absorb a rise.

How fixed deals work, including two, five and ten year options, is covered on the fixed rate mortgages page, which also explains what happens when the fixed period ends.

Other variable rate mortgages are set by the lender rather than tied to the base rate. The standard variable rate, or SVR, is the lender's own rate, which most loans move to when a deal ends. A discount mortgage takes a set amount off the SVR. The lender can change its SVR at any time, within the terms.

SVRs are usually higher than tracker or fixed deals, so borrowers often switch to a new product when their deal ends. The Bank of England publishes the base rate and each change to it, which shows how trackers would move (Bank of England, accessed 20 Oct 2026).

Many tracker mortgages let the borrower leave or overpay without an early repayment charge, which makes them more flexible than most fixed deals. Others carry charges during the tracker period, much like a fix. The offer shows which applies, and lifetime trackers more often come without charges than two or five year trackers do.

A tracker without charges can work as a stopgap, for example while waiting to see where rates go or before a planned move. Current pricing for trackers and fixes is set out on the residential mortgage rates page.

Compare tracker mortgages on the margin above the base rate, the length of the tracker period, any collar, the fees and whether early repayment charges apply. The total cost over the period depends on where the base rate goes, so testing the payment at a higher rate shows how much room the budget has if rates rise.

A tracker's margin and fees together show its real cost, in the same way as the rate and fees on a fixed deal.