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The win-win 'gamble' mortgage experts are urging borrowers to take in 2026

ended 08. December 2025

HSBC is one of several UK lending giants predict a drop in the base rate next year and markets - where mortgage prices are determined via Swap rates - a low of 3% could be possible by the end 2026.

With rates likely to fall mortgage advisers are finding borrower interest in tracker mortgages is increasing.

A tracker allows borrowers to benefit from immediate moves in the base rate, unlike fixed rates where the borrower is stuck on the same repayment amount until the end of their deal; normally between two and five years.

As the name suggests, a tracker mortgage sets a fixed interest rate and tracks it to the base rate. 

For example, you might get a tracker mortgage which is set to track 1% above the base rate. This would have meant when the base rate fell to historic lows of 0.1% a few years ago your mortgage rate would have become 1.1%. When the base interest rate rises again, your tracker mortgage will adjust to the new base rate plus 2%.

Jack Tutton, director at SJ Mortgages said the gamble of a tracker product was becoming more appealing to mortgage holders given further predictions of cuts to the base rate later this month and into 2026. 

He said: “A big draw with trackers, too, is the fact that in a lot of instances there currently isn't a large difference to the payable rate when comparing it to fixed rate alternatives. ”

Whilst forecasters believe that more cuts to the base rate are in the offing, it would not take much for the tide to turn whether due to events here in the UK or around the world. 

"It is for this reason that a tracker is always a gamble as you have no certainty in your mortgage payments. It's important to understand whether the tracker product you are looking at comes with any penalties should you want to change it in the future should financial markets move against you."

David Stirling, independent financial adviser at Mint Wealth Ltd said borrowers who opt for a tracker do need to be confident in being able to absorb payment fluctuations and had enough of a financial buffer to handle potential ups and downs. 

"The appeal is that some trackers come without early-repayment charges, allowing you to treat the product as a strategic, temporary option with the ability to reassess. 

"This allows a potential remortgage in 2026 if rates fall or more competitive fixed deals emerge. However, for those with dependents, on tighter budget constraints or a lower tolerance for uncertainty, I’d be more inclined to choose a short- to medium-term fix, such as a two- or five-year product, for the added stability and peace of mind."

Craig Fish, director at Lodestone Mortgages said that at a time when it looks like the Bank of England base rate will drop consistently, a tracker is a very good product choice. 

"Of course, there are important caveats such as people being made aware that rates can also increase. However, with careful planning and advice, a tracker product at the current time could be a very wise choice as long as it’s being compared to the best available fixed rates and the risk is understood."

 Patricia McGirr, founder at Repossession Rescue Network reminded borrowrs that while a  tracker can feel like freedom when rates fall, but it is still a gamble on the Bank of England’s mood. 

"Borrowers with stable incomes and spare capacity can ride the bumps and may well benefit if Bank Rate heads towards the predicted 3% by the end of 2026. For households juggling unpredictable earnings, the volatility can be brutal. Most clients are tired of surprises and want certainty baked into their monthly outgoings, which is why fixes still dominate real demand. 

“Trackers might win on paper next year but only if your finances can take the punch. The real risk is choosing hope over affordability.”

Darryl Dhoffer, Founder at Bedford-based The Mortgage Geezer commented:

"The pricing gap between fixed and tracker mortgages is expanding. Despite forecasted BOE rate cuts in December and throughout 2026, current high-rate trackers are hard to recommend. Even with a possible three 0.25 basis point reductions, the real benefit will only materialise then. With significant economic data pending in 2026, it is prudent to defer recommending any variable interest rate products for now at least."
 

Michelle Lawson, Director at Fareham-based Lawson Financial commented:

"Trackers have their place but many borrowers prefer the certainty and stability of fixed rates still. Some also don't take the appropriate advice and tie in to a fixed rate and fall foul of paying the penalties which eradicates the efficiency. The upcoming potential base rate cut may make them more favourable for some but unless the Bank of England really get involved and reduce quicker, the fixed rate markets are still more keenly priced."
 

8 responses from the Newspage community

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Editor
Jack Tutton
Director at SJ Mortgages
The gamble of a tracker product is becoming more appealing to mortgage holders given further predictions of cuts to the Base Rate later this month and into 2026. A big draw with trackers, too, is the fact that in a lot of instances there currently isn't a large difference to the payable rate when comparing it to fixed rate alternatives. Whilst forecasters believe that more cuts to the Base Rate are in the offing, it wouldn't take much for the tide to turn whether due to events here in the UK or around the world. It is for this reason that a tracker is always a gamble as you have no certainty in your mortgage payments. It's important to understand whether the tracker product you are looking at comes with any penalties should you want to change it in the future should financial markets move against you.
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Editor
David Stirling
Independent Financial Adviser at Mint Wealth
I’d only opt for a tracker if I were confident I could absorb payment fluctuations and had enough of a financial buffer to handle potential ups and downs. The appeal is that some trackers come without early-repayment charges, allowing you to treat the product as a strategic, temporary option with the ability to reassess. This allows a potential remortgage in 2026 if rates fall or more competitive fixed deals emerge. However, for those with dependents, on tighter budget constraints or a lower tolerance for uncertainty, I’d be more inclined to choose a short- to medium-term fix, such as a two- or five-year product, for the added stability and peace of mind.
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Editor
Craig Fish
Director at Lodestone Mortgages
At a time when it looks like the Bank of England base rate will drop consistently, a tracker is a very good product choice. Of course, there are important caveats such as people being made aware that rates can also increase. However, with careful planning and advice, a tracker product at the current time could be a very wise choice as long as it’s being compared to the best available fixed rates and the risk is understood.
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Editor
Justin Moy
Managing Director at EHF Mortgages
Tracker products do have their place and are more suited to those more speculative borrowers or those looking for a temporary deal, perhaps to retain some flexibility if moving home in the coming months. Some lenders offer a No-Early Repayment Charge tracker, such as Nationwide and Santander, with the ability to take a fixed deal if rates do change direction, but as always, you need to check your numbers as trackers are more expensive than their equivalent fixed deals, based on today's base rate.
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Editor
Michelle Lawson
Director at Lawson Financial
Trackers have their place but many borrowers prefer the certainty and stability of fixed rates still. Some also don't take the appropriate advice and tie in to a fixed rate and fall foul of paying the penalties which eradicates the efficiency. The upcoming potential base rate cut may make them more favourable for some but unless the Bank of England really get involved and reduce quicker, the fixed rate markets are still more keenly priced.
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Editor
Dariusz Karpowicz
Director at Albion Financial Advice
Trackers are the comeback kid of the mortgage world right now. With the Bank of England base rate expected to drop towards 3% by end of 2026, a tracker could save you serious money compared to fixing. The key? You need spare cash in your budget to absorb any bumps if rates go the other way.
Before you jump in, check if your tracker has early repayment charges. Many from Nationwide and Santander come penalty free, letting you switch to a fixed rate if markets turn. Perfect for borrowers who want flexibility or are planning to move soon. Just remember, trackers suit those who can stomach a bit of uncertainty, not those on tight budgets needing predictable monthly payments.
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Editor
Darryl Dhoffer
Founder at The Mortgage Geezer
The pricing gap between fixed and tracker mortgages is expanding. Despite forecasted BOE rate cuts in December and throughout 2026, current high-rate trackers are hard to recommend. Even with a possible three 0.25 basis point reductions, the real benefit will only materialise then. With significant economic data pending in 2026, it is prudent to defer recommending any variable interest rate products for now at least.
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Patricia McGirr
Founder at Repossession Rescue Network
A tracker can feel like freedom when rates fall, but it is still a gamble on the Bank of England’s mood. Borrowers with stable incomes and spare capacity can ride the bumps and may well benefit if Bank Rate heads towards the predicted 3% by the end of 2026. For households juggling unpredictable earnings, the volatility can be brutal. Most clients are tired of surprises and want certainty baked into their monthly outgoings, which is why fixes still dominate real demand. Trackers might win on paper next year but only if your finances can take the punch. The real risk is choosing hope over affordability.