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Base Rate Tracker Mortgages are a type of variable rate mortgage that will usually track either the Bank of England Base Rate, the lenders own Base Rate, or the LIBOR Rate, plus a margin. Base Rates are likely to affect the interest rate charged on your mortgage account.
Here we explain Base Rate Tracker Mortgages, and margins, in a bid to help you understand the different terminology surrounding Base Rates, and how they may affect the interest charged on a mortgage product. We also offer further information as to how we might be able to assist you when it comes to base rate tracker mortgages.
Table of Contents:
So, as we established above, a Base Rate is likely to affect the interest rate charged on your mortgage account. A Base Rate Tracker Mortgage (or Base Rate Trackers as they are often referred to as), which has become a popular choice for borrowers in recent years, is a variable rate mortgage and will usually track either the Bank of England Base Rate, the lenders own Base Rate, or the LIBOR rate, plus a margin.
For example, a customer may be offered a Bank of England Base Rate Tracker mortgage with a loading of 1%. Thus, if the Bank of England Base Rate were currently 6%, the rate charged to the account would be (BoEBR 6% plus the margin of 1%), that is 7%.
The lender may apply a discount to this, for example, a discount of 2% for the first two years would mean that the initial pay rate would be: (BoEBR 6% plus the margin of 1% less the discount of 2%), that is 5%.
Thus, for the life of the mortgage, or for a period of time, the rate of interest charged will increase or decrease in line with the Bank of England Base Rate.
There are actually many types of base rates, and these include:
Basically, one of the above base rates is likely to affect the interest rate charged on your mortgage account.
The level of "Margin" (or "Loading") applied in addition to the Base Rate, will depend upon each borrower's individual circumstances, thereby providing lenders with a flexible mechanism to accommodate different types of lending risk.
Thus for instance, an amply salaried borrower, having no adverse credit history, would be offered a much keener "margin" over base rate, than a borrower whose stability of employment and residence was poor, and who had a county court judgement registered against them!
As an example, an all purpose lender may then apply the following margin (or loading) differentials in the following circumstances:
| Borrower employed, good salary, no adverse credit: | Base Rate plus 0.50% |
|---|---|
| Borrower self-employed, no accounts, no adverse credit: | Base Rate plus 1.00% |
| Borrower employed, adequate income, 2 CCJ's: | Base Rate plus 1.25% |
| Employed, adequate income, 3 CCJ's plus 3 months arrears: | Base Rate plus 2.50% |
Usually, yes!
We'll obviously need some information regarding your circumstances, and the property that will act as security. From this, one of our experienced Advisors will be in a position to provide you with an in-principle decision as to how we can assist you, together with an indication of the type of mortgage product and interest rate that is likely to suit your requirements.
If you are happy to proceed along those lines, our mortgage advisor will arrange to examine and discuss your circumstances, needs and aspirations. When our advisor has carefully assessed your situation, you will then be provided with full details of the mortgage product and attendant costs of arranging the transaction, together with a suitability report confirming their recommendation and how our advisor has arrived at it.
We hope that has explained and answered your questions regarding base rate trackers / base rate tracker mortgages. If you are thinking of applying for a mortgage or remortgage, and require our assistance, naturally without any obligation, we would of course be delighted to hear from you! You can speak with a qualified Mortgage Advisor seven days a week by calling us on FREEPHONE 08000 282 281 up until 10.00pm daily, including weekends, or why not enquire online anytime! We think you will find our approach to be friendly, yet professional. Our aim is to find the most suitable solution for you, whatever your circumstances!
The overall cost for comparison is 9.8% APR.
The actual rate available will depend upon your circumstances. Ask for a personalised illustration. APR variable and based on a usual case. Most customers are likely to receive a lower rate or the same rate as our overall cost for comparison rate - learn more about APR.
There are no upfront broker fees.
However, a fee may be charged on successful completion. An indication is that on conforming cases (straightforward applications with no or minimal adverse credit) a fee may be charged of up to 1% of the amount advanced, typically £795 and will depend on your circumstances.
For non-conforming cases (where case research and processing may be more complex due to adverse credit or unusual circumstances), a fee may be charged of up to 3% of the amount advanced, typically £1,995.
THINK CAREFULLY BEFORE
SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED
IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
Adding existing debt to your mortgage will increase the repayment term and overall cost.
Are you worried and becoming stressed because you are having problems getting a mortgage or remortgage? Worry and stress no more! Here at Shire Direct we provide tailor made mortgage solutions to suit you, and can usually help with all kinds of circumstances including...
Remember, we're here to help, and would love to hear from you!
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Shire Direct and Shire Direct Mortgages are trading styles of Shire Processing Centre Limited which is
Authorised and regulated by the Financial Services Authority in respect of regulated mortgage products and general insurances.
Registered No: 302389. Commercial funding and Secured Loans are not regulated by the FSA.
Licensed Credit Brokers. Consumer Credit Licence Number: 349999.
Shire Processing Centre Limited is registered under the provisions of the Data Protection Act by the Information Commissioners Office: Registration No: Z6795249. Registered in England & Wales. Company number: 2732202. Telephone calls may be recorded for training, monitoring and security purposes. All applicants must be aged 18-years or over.
