The 'Track & Lock' product follows base rate but allows customers to lock into any Lloyds TSB fixed rate deal at any point, without incurring an early repayment charge.
By combining the features of two popular products, Track & Lock removes the element of chance associated with a traditional tracker, enabling customers to reap the benefits of rate falls, safe in the knowledge they can lock into a fixed rate deal if interest rates begin to rise.
According to the Bank, as many as one in three remortgagers will not benefit from interest rate cuts purely because they refuse to consider a tracker mortgage. Even though over 60 per cent believe interest rates will drop in the coming months, one in five homeowners are not prepared to trust their instinct for fear of being caught out by another rate rise.
Alison Burns, director of network mortgage sales, Lloyds TSB commented: “Having witnessed five rate rises in two years, it’s not surprising some consumers are reticent to take a gamble on rates not rising again. Currently just 15 per cent of homeowners have a tracker mortgage but as thousands face increased monthly repayments they need to consider all the remortgaging options available."
The product is available for loans between £25,000 and £1 million, with a 3 per cent ERC if repaying over 10 per cent of the loan’s balance in any one year or remortgaging to another lender during the agreed fixed term.
Borrowers have the choice of a five-year tracker at 5.99 per cent up to 90 per cent LTV with a £99 application fee and a £299 product fee, or a five-year tracker at 6.19 per cent up to 90 per cent LTV with a £99 application fee but no product fee.
