This is a variable rate mortgage where the interest rate follows the Bank of England base rate plus the mortgage lenders set rate. For example, if the Bank of England base rate is 3.75% the lender may set a further rate of 1-2% above this. You would therefore be paying 4.75 - 5.75% interest. If the Bank of England rate was to drop to 3.5% you would be paying 4.5 - 5.5%. Some lenders offer introductory periods for tracker mortgages of as little as .75% above the base rate. Of course, as with all variable rate mortgages, the interest rate can go up as well as down.
