Tracking a 0.25 per cent base rate may seem an odd decision when you could fix for up to five years at a lower rate, however, there is one big advantage to a good lifetime tracker – flexibility.
A fixed-rate mortgage will almost inevitably carry early repayment charges, you will be limited as to how much you can overpay, or face potentially thousands of pounds in fees if you opt to leave before the initial deal period is up.
You should be able to take a good fixed mortgage with you if you move, most are portable, but there is no guarantee your new property will be eligible or you may even have a gap between ownership.
A good lifetime tracker has no early repayment charges, you can up sticks whenever you want and that suits some people.
Tracking at a low rate looks good now, especially when rates are not predicted to go up for the next three and not rise substantially over the next five years, but that may not turn out to be the case, so make sure you stress test yourself against a sharp rise in base rate.
Article by Simon Lambert & Sarah Davidson for ThisIsMoney.co.uk