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6 Apr 2020


Tracker rates at 2007 level, despite base rate cut

The average rate on base rate trackers is at the same level as this time last year, despite a 1.25% cut in base rate.

In October 2007, the average rate on a tracker mortgage stood at 6.23%. Today it stands at 6.27%.

Commenting on the figures, Michelle Slade, analyst at Moneyfacts.co.uk said:

“Despite the best efforts of the Bank of England to bring borrowing costs down, lenders just aren’t passing the cuts on to consumers, either on the mortgage front or on other aspects of finance including business.

“Since the 0.50% cut at the beginning of the month, numerous lenders have announced cuts in their tracker rates. However, with all the increases during the last year, borrowers are in no better position than they were a year ago.

“Next week the Monetary Policy Committee (MPC) meets again and many commentators are predicting a further cut in interest rates, but it is hard to see what influence this and future MPC decisions will really have. Base rate used to be a major barometer when determining mortgage rates, but it could become an obsolete component of a mortgage if lenders do not pass cuts on.

“Lenders are factoring in a much bigger margin for risk than ever before and as a result mortgage rates remain high. The last time base rate was 4.50%, borrowers could have obtained a rate of 4.25% on a two year tracker. Today the best rate on offer is 5.99%.

“If base rate continues to be cut, many borrowers could find that their rate is collared at a higher level. Some building societies have limits below which they do not pass the base rate on to both new and existing customers. These include:

  • Nationwide BS - all trackers collared at 2.75% plus margin - i.e. if base rate drops below 2.75%, your mortgage will stay at 2.75% plus loading/margin 
  • Chesham BS – discounts and trackers collared at 3.50% 
  • Skipton BS – Trackers collared at 3.00%


“As the rates that deals are collared at are quite low, they haven’t been implemented in quite some time. However, if base rate continues to be cut, we could see more lenders introducing them.“


Moneyfacts Group
Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry. 

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