Two Year Tracker Mortgages

Two-year tracker mortgages are one of the most common types of mortgages you’ll have to choose from when you sign up for a new deal. Before picking one, you’ll want to understand exactly what these mortgages track and what that means for your repayments.

We’ll explain the details, including whether a tracker mortgage will likely rise or fall over the next two years. This will help you decide if it’s right for you and whether you need advice before moving forward.

We’ll explain…

What is a two-year tracker mortgage?

A two-year tracker mortgage is a tracker mortgage with an introductory rates period lasting two years.

Tracker mortgages track the Bank of England base rate, the UK’s official rate of interest. When the base rate goes up or down, the tracker mortgage rate goes up or down, too, remaining a set percentage above it.

The best two-year tracker mortgage deals are around 0.5%- 1% above the base rate. So, if the base rate rises by 0.25%, the tracker rate will rise at an equivalent increment. If the Bank of England base rate falls by the same percentage, tracker rates will follow suit.

Tracker mortgages are available for two, three, or five years, or (less commonly) seven or ten years. At the end of your chosen period, you’ll need to remortgage or move on to your lender’s standard variable rate (SVR), which will likely be higher.

Tracker mortgages are one type of variable rate mortgage. The other types include standard variable rate mortgages and discounted variable rate mortgages.

To learn more, read our guide, tracker vs variable rate mortgages.

Are they a good idea right now?

While we can’t advise whether a tracker mortgage is a good idea, you’d need to speak to an expert. Most people prefer that their mortgage repayments stay roughly the same or become cheaper over time. So, a two-year tracker mortgage would suit them best when the base rate is expected to remain steady or fall within the next two years.

For example, if you had signed up for a two-year tracker mortgage at the start of 2020 when the base rate was 0.75%, your initial rate may have been around 1.75-2.75%. In March 2020, the base rate fell to 0.1%, which remained until December 2021, so your mortgage repayments would have become cheaper.

Since then, and up to September 2023, the Bank of England base rate has increased 14 consecutive times. However, since August 2024, the rate has been cut four times and is currently 4% (October 2025).

So, if you choose a two-year tracker mortgage now, you should know that your mortgage repayments could increase while inflation remains high. While it is also possible that they could fall at some point (since we can’t predict the future), that possibility currently looks much less likely.

Other variable rate mortgages are also likely to rise, potentially by more than the Bank of England base rate. Fixed-rate mortgages, on the other hand, will remain the same throughout the initial term (e.g., two years, three years, or five years).

How to compare deals

There are a variety of two-year tracker mortgages on the market now, ranging from about 1% to 1.75% above the Bank of England base rate. You should speak to a mortgage broker to find the best one for which you’re eligible.

The benefit of using a broker is that they will also discuss your other mortgage options with you. These include three-year or five-year tracker mortgages. This gives you a longer period before you move onto your lender’s standard variable rate, which will be higher than the tracker rate. Another option is a fixed-rate mortgage, which might suit your needs over the next two years.

Finally, if there are ways that you can improve your application to get a better rate, your broker will advise you on these. Adding a little more to your deposit can sometimes give you access to more mortgage deals or waiting for a particular incident to expire from your credit report. If you’d like to speak to a broker, get in touch.

Lenders who offer these mortgages

Many of the biggest names on the high street offer two-year tracker mortgages, including…

• Barclays
• HSBC
• Nationwide
• Santander
• TSB

They are also available from smaller and more specialist lenders, who may offer better rates.

Given the vast market, it’s advisable to have a mortgage broker compare every available deal for you rather than approaching a lender directly to ensure the best rates.

Do existing customers get better rates?

Not necessarily. Some tracker mortgage lenders, including Barclays, will offer an exclusive, lower tracker rate if you’re an existing mortgage customer (EMC). This is to incentivise you to remain with them rather than comparing rates across the market when it’s time to remortgage.

If you speak to a broker before signing up for this exclusive rate, they will compare it to any other currently available deals, which may be cheaper.

They will give you an honest and transparent answer about whether you’re better off staying with your current lender, applying to a new lender, or changing to a different type of mortgage.

Speak to a broker who specialises in tracker mortgages

Given the unpredictability of future interest rates, particularly in these times of high inflation, it’s smart to speak to a broker who specialises in tracker mortgages before deciding to tie you into a deal for two years or more.

We work with numerous brokers who are highly experienced in how different economic conditions could affect your mortgage in the future. If you have any questions, we can connect you for a free, no-obligation chat. Just call us on 0330 818 7026 or make an enquiry online.