Are clever borrowers opting for cheaper tracker rates as rates remain high – ready to switch and lock in when they come down?

This is more about the experienced Broker helping borrowers with a short-term solution, as most borrowers will not be aware of this approach. Many lenders have tracker options that have little or no Early Repayment Charges, so the ability to switch to a fixed deal at a much later date could be a good option, but this is all subject to individual circumstances. You also have to watch the product fees, as getting the cheapest trackers may incur a product fee, and you'll end up paying another one if you also want the cheapest fixed deals, so just ensure you have looked at the figures before you consider this approach. But it is a way forward for those with larger mortgages in particular, and is worth looking at.

Clever borrowers will be the ones speaking to good brokers who can talk through the options available to them. Tracker products are priced on different markets to fixed rates hence the rate differential. This won't be for everyone but there are a lot of positives to this to take a lower rate now and potentially secure and switch to a lower rate later on if the markets stabilise and fixed rates reduce below that of the trackers.

Most first-time buyers have never even heard of tracker mortgages, which is a shame because right now they could be a genuinely useful short-term play. With rates shifting fast off the back of geopolitical tension, a tracker with no early repayment charges lets you sit tight on a lower rate and switch to a fixed deal once the dust settles.
The catch? You carry the risk if rates climb further, and watch those product fees; paying one now and another when you fix could eat into your savings. Personalised advice from a good broker is everything here. Your circumstances dictate the strategy, not the headlines.

It’s more about the experience and advise of the broker than how clever the borrower is. If their circumstances and their attitude to risk works for a tracker, then that will be recommended, but not everyone will be in a position to take the risk if rates going up while hoping for a reduction in the future.

For borrowers coming to the end of a deal, or sitting on a standard variable rate waiting for the "right moment," the instinct is to panic. My advice? Don't.

The best tracker rates right now are sitting just above 4%, priced at Bank of England base rate plus a margin. The base rate is currently 3.75%, and while markets are now pricing in potential hikes later this year, the longer-term direction of travel is still expected to be downward. The key advantage of a well-chosen tracker is that if the Bank of England cuts rates, your payments fall automatically, without you having to do anything. No remortgage, no paperwork, no delay.

Critically to this tracker strategy is finding one with no, or a very low, early repayment charge. This means that you can bail out onto a fixed rate when rates do eventually fall with little cost.

With mortgage rates climbing following the conflict in Iran, savvy borrowers are dodging long-term locks in hopes of a future dip. At the time of writing, leading the charge, Co-operative Bank offers a 4.34% tracker at 60% LTV and 4.64% at 70% LTV, both featuring no ERCs. Barclays follows closely at 4.75% (70% LTV), also with no ERC.

While best fixed rates currently trade around 5.0%, the strategy changes for those with smaller deposits. For buyers at 90% or 95% LTV, trackers rarely come into play, as lenders often restrict these flexible deals to lower-risk tiers. These borrowers are generally funneled into fixed rates, which currently average between 5.45% and 6.07% for high-LTV products.

If you have a larger deposit, "no-fee-to-exit" trackers are powerful tools for flexibility. However, if you have a smaller deposit, your best bet is often a shorter 2-year fix to wait out the current volatility, subject to circumstances and borrowers risk appetite.

Some borrowers are using trackers as a short-term strategy, planning to switch to a fixed rate if rates fall. This can work well, particularly with a no early repayment charge deal, as it allows you to move without penalty. The downside is you remain exposed to further increases. While the lowest tracker rates often have fees of around £999, if used short term (ie less than 6 months), a no-fee option is often more cost-effective, especially below £500,000.

Another option is to secure a fixed rate now, particularly if your mortgage starts in 3–6 months. This protects against further rises, while still allowing you to switch to a better fixed rate or tracker before completion if the market improves.

The key is balancing flexibility with protection—rates could fall, but they could just as easily rise further given current uncertainty.