tracker and variable

tafkar

Hi

Had a tracker rate with Nationwide when we took at the mortgage (lasted 2 yrs) now gone on to variable rate. Noticed mortgage (std repayment type) has gone up by £150/month. Maybe I misunderstood but I thought tracker guarantees matching the bank of england rate and variable does (but not guaranteed). Does anyone know why there is such a difference.

Rgds

Locoblade

Your understanding of trackers against variables is correct, but what you've forgotten is that they aren't necessarily the same rate to start with.

Basically, it all depends what your tracker was compared to the banks SVR (standard variable rate). You could well have been on a tracker that was, for example BoE rate -0.5% which would have given you a rate of 4.5% (or 4% as of yesterday). The lender's SVR will be up around 6-6.5% (i.e approx BoE + 1.5%) hence the big difference in your payments.