Lifetime Tracker mortgages explained - Apply for a mortgage

Lifetime tracker mortgages are homeowner loans that will fluctuate, going up or down the scale, in line with the constant changeability of the Bank of England’s base rate. These lifetime tracker mortgages are currently very popular within the UK, due to the continued record low rate and subsequent lower monthly repayments. Typically, lifetime tracker mortgages have a low rate created anywhere between 0.5%-3% above the Bank of England’s base rate for the entire term of a mortgage.

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Apply for a Lifetime Tracker Mortgage

Known and liked for their transparency, lifetime tracker mortgages are agreed between both lenders and borrowers over your whole mortgage term and can be acquired for up to as much as 80% of the value of your home. With a set maximum (and relatively low) percentage they offer flexibility as well as choice and the all important guarantee that once your margin is set, your mortgage provider cannot influence your payments through their own Standard Variable Rate (SVR) which is infamously changeable on their own terms.

Interest rates and discounts

Lifetime tracker mortgages can also incorporate discount policies but will usually charge you a fee to apply which varies greatly dependent on your initial rate, annual APR (‘Annual Percentage Rate’ which is used to calculate the amount of interest charged on the balance of your homeowner loan) and loan to value percentage secured. Standard tracker mortgages have an arranged ‘early repayment charge’ (ERC) period and any overpayment or change of mortgage product during this stage may incur charges known as ‘early redemptive penalties’. Not to be confused with a standard tracker or a lifetime mortgage, most lifetime tracker mortgage lenders (dependent on your individual terms of your agreement) do not usually attach these fees, so borrowers can still move to fixed rates if they wish, later in the life of their mortgage.

Is a Lifetime Tracker Mortgage right for me?

Lifetime tracker mortgages are more suited to people with a larger portion of their house paid off, this could include if you have a larger deposit to put down on the house or if you are looking to change your mortgage deal once a portion of your mortgage has already been paid off. The best deals are only available to people who have already paid off a large amount of their property.

Benefiting from a lifetime tracker mortgage requires the ability to be financial disciplined and strict with budgeting. Unlike fixed mortgages your repayments will vary and therefore you have to be prepared for the unexpected or worst-case scenario. Lifetime tracker mortgages offer attractive, low rates because this type of mortgage is higher risk than a fixed rate mortgage, although interest rates are scheduled to rise their current low rate still make tracker mortgages an attractive choice.

What are the differences between a Tracker Mortgage and a Lifetime Tracker Mortgage?

Lifetime tracker mortgages are different to tracker mortgages because it is stipulated that the rate which is added to the Bank of England’s Base rate will remain the same for the entire life of the mortgage, a normal tracker mortgage however may be renegotiated after a stipulated set period. Lifetime tracker mortgages may not, on face value, look cheaper than discount tracker mortgages, but because the rate is agreed for the entire term of the mortgage you know that the rate won’t change; whereas discount tracker rates are likely to rise higher after the first agreed term.

Where can I find a Lifetime Tracker Mortgage?

HSBC is the largest provider of tracker mortgages but most high street lenders offer them including Barclays and the Woolwich. With so many companies to choose from, using a comparison tool that can give you access to a range of quotes quickly and easily is a good way of researching the market.

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