Is a tracker mortgage still an option for remortgage in 2025?
The mortgage market is shifting. Following several cuts to the Bank of England base rate – including a 0.25% cut to 4% in August – tracker mortgages are once again on the radar for borrowers remortgaging in 2025. These rate moves make trackers more appealing, but how do they stack up against other options?
Why tracker mortgages matter now
A tracker mortgage mirrors the Bank of England’s base rate plus a fixed margin. This means your monthly payments go down if rates fall and rise if rates go up.
This is different to a fixed rate mortgage where you will pay the same amount each month for a set period – typically two or five years, but with longer fixes also available.
If interest rates change so does the rate on your tracker mortgage, expectations are that interest rates will continue to decrease, which could make a tracker mortgage an attractive option for some borrowers. In fact, Andrew Bailey, the Governor of the Bank of England, recently told the House of Lords Economic Affairs Committee that “the path of [interest] rates is still downwards”.
Following the recent base rate cut in August, some experts are predicting further cuts later in the year and perhaps further movement into 2026.
However, the Governor has long stated that any future movement will need to be made gradually and carefully and is heavily reliant on a number of key factors such as inflation, the UK economy and any external geopolitical shocks. While these factors remain very hard to predict, those who have the means and confidence to ride the wave of future interest rates are exploring tracker rate mortgages.
But fixes remain strong too
That said, fixed-rate mortgages do remain very competitive and in some cases are more affordable than trackers – at least in the short term. According to Moneyfacts, average mortgage rates on both two-year and five-year fixed rate products sit at around 5%, with sub-4% rates available on some mortgages for qualifying borrowers.
Fixed rates offer predictable payments and peace of mind, which is especially helpful when budgeting in uncertain times. While you may not reap the benefits of a drop in interest rates, you will always know how much you’re paying and to many borrowers, that is more powerful than any potential saving.
Which might suit you best?
- Choose a tracker mortgage if you’re comfortable with potential fluctuations and want to benefit immediately from any further base rate cuts.
- Opt for a fixed-rate mortgage if your focus is on stability and knowing exactly what your mortgage will cost, regardless of rate movements.
- Discuss whether discount variable options might suit your situation, especially if you’re unsure how long you’ll stay in your home.
Get advice before you decide
The right choice depends on your personal situation, risk appetite, and future plans. A mortgage adviser can explain the differences clearly, help you weigh tracker benefits against fixed-rate certainty, and guide you toward a solution that best fits your needs.
Is your fixed term ending soon? We can help you compare your options and choose with confidence.
To book your appointment with a mortgage adviser, please get in touch here 01786 449969 or info@stirlingmortgageshop.co.uk
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
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