Tracker Mortgages
Your interest rate is directly linked to an independent rate, such as the Bank of England base rate or the 3-Month LIBOR (the London Interbank Offered Rate) for a set period of time. For example, your rate may be 1.5% over the Bank of England base rate for a period of three years.
Pros
Your rate will reflect the independent rate being tracked. This means when the independent rate falls, you are guaranteed to benefit from the rate reduction in full at pre agreed times.
Cons
If the independent rate rises, your rate will automatically rise so you may find you are paying a rate which is higher than other variable rates.