How to choose your mortgage and why?

Choosing the right type of mortgage can be a matter of concern to any prospective homeowner. Especially if all those numbers, percentages and payback periods make little or no sense to you.

While there are many companies that offer mortgages with options that are meant to work for the borrower, it might be best to zone in on the best repayment scheme when going in for a long-term mortgage requiring commitment against your monthly earnings.

In this write-up, we explain the difference between a tracking mortgage and a fixed rate mortgage. Keep reading to find out how you can benefit by choosing the mortgage that works for you.

Should I get a fixed rate or tracker mortgage?

As with any repayment scheme, when repaying a mortgage, the initial thought a borrower will have is ‘how am I going to pay back the loan?’. This practical thinking is what helps plan the way forward before getting a mortgage approved.

As all of us do, we have our commitments that determine the spending capacity or ‘keep aside’ monies at the end of the month. Monthly earners solely depend on a fixed income such as a salary. A fixed rate mortgage may be suitable for these types of set income earners. While fixed-rate repayments are a safer option, we will look at some of the cons that come with it later on.

Then there are the ‘risk takers’, those who closely monitor the housing prices, the mortgage market, and most importantly, base rates set by the Bank of England. These borrowers stand to gain from a tracker mortgage. While a fixed-rate mortgage ensures a steady fixed repayment scheme, a tracker mortgage the advantage to gain profitability on repayments on fluctuating, particularly low base rates as specified by The Bank of England. If the base rate falls, the borrower might have the luck of paying back a lower interest rate than what a fixed rate payer would.

Volatility in the financial sector has seen a turbulent upheaval in the past 2 years, and although much more stable than then, interest rates are still on the higher average.

While both options are viable mortgage solutions, the borrower must decide whether he or she is within the capacity of paying the mortgage without jeopardizing their total projected investment.

Pros and cons of fixed vs tracker mortgages

Like any deal, there are the pluses and minuses we need to be aware of when choosing a mortgage.

As you may have guessed by now, fixed rate mortgages are considered a better option by many who prefer to have no change in the repayment rate. This allows the borrower to pre-plan his/her future with consideration given to paying back the mortgage. Fixed rate mortgages work well in volatile economic situations and uncertainty that do not ensure stable interest rates.

Since tracker mortgages are based on bank base rates, the repayment rate could change with the Bank of England revising it’s rates. While this may seem a great way to save up on expanding high mortgage rates if the bank rates drop, however if the bank rates escalate, the repayment rate also grows. The advantage to the borrower therefore is when the bank lowers it’s rate, where he/she stands to gain by a revised, lower monthly repayment. 


Mortgage companies understand the requirements of their clients and try to identify solutions they can put forward to assist and support their clientele in obtaining mortgages. This not only helps the client to understand the right option to go for, but also safe guards them from ending up in a situation where their property might be re-claimed due to non-payment.  

Choosing the mortgage repayment method is an integral part of the whole process. While fixed rates seemingly are the better option to many, tracker mortgages can hold benefit for those willing to take a risk and invest in the belief that bank rates will drop, thereby lowering the repayment rates.

This article hopes to throw some light and clarity into the advantages and disadvantages of both the fixed and tracker mortgage methods.

Watch out for our next blog post which will focus on even more interesting areas of mortgaging for your benefit.


Approved by the Openwork Partnership on 14/02/2024