Track your Mortgage : Hotfoot

 What is a Mortgage tracker ? A home loan where the interest rate is based on the Bank of England base charge and a set portion. Due to the Covid19 pandemic, the base charge at present is at 0.1%. So, the interest charged on a tracker home loan has increased to 1. 

Hence, the interest a buyer pays is 1.1%. The higher the base rate, the higher the interest rate on the home loan tracker would be.

Every first Thursday of each month, BoE decides if to change the base rates or not. However, in recent years, the rate had been fairly stable.

How does it work ?

It is an online tracking system , you can simply track loan application status and also can track monthly payments. A certain portion is added to the base charge is the quantity of interest paid on your home loan. 

If the interest paid on monthly home loan repayments is equal to the base charge plus 1.5%. At times, it is 0.5%. The quantity of interest you would pay monthly repayment is 2%.

Because these debt rates follow the base charge, it means the charge you pay can vary. Just like a normal variable-charge mortgage. 

So when the basic charge incremented to 1%, your pay would increase to 2.5%. Similarly, if the base charge fell, so would the charge you pay.

How to track your application

Once , you have applied for the loan , you can simply visit the website to check your status online. You need to first register yourself.

Post registers kindly login and go to track my loan application . You can see if it has approved or in the process of approval.

Tracker Mortgage VS Variable Mortgage ?

With a variable mortgage, lenders set their own rate of interest. They can change the rates of interest and charges at any point in time. 

In the case of tracker mortgages, they are bound to an exterior rate, which a lender should follow. Hence, tracker home loans are quite cheaper as compared to variable mortgages.

Disadvantages of a tracker mortgage ?

There are a few disadvantages of tracker home loan which include:

 

• If the base charge increases, your repayments will also get incremented. The payment charges may vary each month depending on the base charges. A tracker mortgage is not suitable for buyers who prefer fixed payments each month.

 

• A collar rate can mean that you won’t be able to take advantage of low rates if the base rate dips below a certain point

 

• You might have to settle an early payment charge if you want to move out of the agreement early

Advantages of a tracker mortgage?

There are few advantages of tracker home loan include :

 

• Tracker home loan is cheaper than other mortgages. They offer low-interest rates to the buyers, hence help them to make a payment on time.

 

• Helps in closing the loan quickly. Tracker mortgages provide buyers to unlock low-interest rates.

 

• If the external rate is low then the buyer would pay less. For 10 years, the base rate of the Bank of England is below 1%.

 

• If the external rate decreases, your interest payments will also decrease.

 

• If the exterior charges go up, some lenders will let you the option of switching to a fixed-rate. This would be free of cost.

 

• It is an online loan tracker , wherein you can track your payments at home. You just need an internet connection and visit the website.