What is a tracker mortgage?

With a tracker mortgage, your interest rate moves in line with another rate – typically the Bank of England’s base rate, though some lenders will use their own base rate. If the base rate goes up or down, your mortgage rate does too.

If the base rate drops, your monthly payments could go down – nice! You could even overpay while the rate’s low to chip away at your mortgage faster. But if rates rise, so will your mortgage payments, so you need to have some flexibility in your budget to afford potential increases.

Tracker mortgages typically run for between two and five years, but there are lifetime trackers that run for the entire length of your mortgage. If you opt for a fixed term, when your deal ends you can switch to another tracker, lock in a fixed rate, or move onto your lender’s follow-on rate.

Are you eligible for a tracker mortgage?

You can apply for a tracker mortgage provided you are over 18 and meet the lender’s eligibility and affordability criteria. Here’s what lenders usually want to check:

Income

Lenders will look at what you can afford when deciding how much to lend. Typically, you can borrow up to four and a half times your annual income, or combined annual income if arranging a joint tracker mortgage. However, some providers may offer you more than this, so comparing is essential to getting the best deal.

Affordability

Expect lenders to look at your outgoings as well as income. They want to know you can keep up with repayments comfortably.

Current mortgage (if remortgaging)

You’ll need to share the details of your existing deal, if you're switching to a new mortgage.

Credit score

Whilst there isn’t a specific credit score required for a mortgage, having a higher score may improve your chances of being accepted. It might be worth checking to see if there is anything you can do to improve your report before you apply for a mortgage.

Every lender’s a bit different, so it’s always worth comparing lenders and deals to find the right fit for your situation.

One more thing… your home may be repossessed if you do not keep up with repayments on your mortgage, so make sure you’re comfortable with what you can afford before taking the plunge.

How does interest work with a tracker rate mortgage?

Whilst tracker mortgages tend to follow the Bank of England base rate, not all do. Some lenders use a different benchmark, so it’s worth checking exactly what your rate is tracking before you apply.

If your tracker is ‘base rate + 0.5%’ and the base rate used as a benchmark by the lender is 4%, your mortgage rate would be 4.5%. If the base rate rises to 4.75%, your rate will jump to 5.25%.

Tracker deals most commonly last two or five years, and after that you’ll move to the lender’s standard variable rate unless you agree a new deal. Some lenders have lifetime options where the tracker rate is in place for the full term of the mortgage.

Most come with early repayment charges if you leave before the term ends, but lifetime trackers may be more flexible. Some don’t charge any early repayment fees, or only during the first few years. Always check the fine print.

How much can I borrow with a tracker mortgage?

With a tracker mortgage, how much you can borrow usually depends on your income – many lenders offer up to around 4.5 times your annual earnings, with some offering more depending on your financial situation. So if you earn £32,000, you could be able to borrow £144,000 or even more. If you apply jointly with someone earning £28,000, that figure could rise to £270,000.

Just bear in mind that your final offer will depend on factors like your outgoings, existing borrowing and deposit size. Income is just part of the picture.

Here’s what else a lender might look at when assessing your application:

  • Monthly outgoings: Lenders will consider your regular expenses like bills, credit card payments and childcare costs to make sure the mortgage is affordable for you.

  • Creditworthiness: A solid credit report can boost your chances of approval, so be sure to check it ahead of your application to spot any errors or find ways to improve your score.

  • Affordability stress tests: Lenders will check if you could afford your mortgage if interest rates rise. If you’re borrowing more for things like home improvements, lenders will also want to ensure you can handle the increased payments.

  • Equity in your home: The more equity you have, the better your deal. A lower loan-to-value (LTV) ratio can help you access more competitive rates.

Mortgage guides

Answering your questions about tracker mortgages

Page updated on 11th September 2025, Reviewed by Richard Groom