As the Base Rate Changes - Will "tracker rates/deals" increase?

lightspeed

I realise that trackers follow the BR and will increase accordingly.

What i would like to know is if i can get a +2% tracker today and say IR's rise next month by .25% will the deal (+2%) also increase (like fixed rate deals) or are they likely to stay the same as the margins haven't changed e.g. could it move to +2.19% above BR?

Hope that makes sense

Wh05apk

Once you have a deal, the margin is fixed, the lender may withdraw the deal, and re-launch with a different margin.

kingstreet

Back in the "good old days" a tracker at base + 0.5% was a decent deal.

Now, with restricted funding available to lenders and the need to strengthen balance sheets, the margin of base + 2% is around the norm.

I don't see any pressure on the margin if rates do start to increase, but there could be implications if the rate hits 4%, leaving tracker borrowers paying 6% or more. Around that point, it's possible lenders might ease the margin on new deals to make the products look more attractive. It would also depend on how they looked relative to standard rate and fixed rate options.

Just an opinion of course.