A Tracker Mortgage uses an interest rate that follows the direction of the base rate of either the Bank of England or that of the mortgage lender. This interest rate can rise or fall and is dependent on decisions that are made by the Monetary Committee of the Bank of England.
Unfortunately, it is very difficult to forecast the base rate and even the experts have a hard time predicting which direction it will go. Therefore, homeowners with a Tracker Mortgage should prepare to deal with higher repayments whenever the base rate increases.
They should aim to manage any interest rate rises that occur during a mortgage tracker's minimum time period, which is two years.