More homeowners do not know what a tracker mortgage is and could be missing out on lower monthly payments as a result, says Alliance & Leicester.
A survey by the mortgage provider revealed over half of homeowners and prospective buyers do not understand how a tracker mortgage affects monthly payments.
Only a third are aware that the interest on a tracker mortgage is linked to the Bank of England (BoE) base rate, says Alliance & Leicester.
Stephen Leonard from Alliance & Leicester said: "There are certain advantages to choosing a tracker mortgage, especially with current low interest rates.
"However, homeowners should ensure they fully understand what type of mortgage they have; they can then be financially prepared should their monthly payments rise."
Mr Leonard says homeowners can benefit from the flexible monthly payments if they are prepared for changes in the BoE base rate.
Alliance & Leicester recommends seeking advice from a knowledgeable advisor before choosing a mortgage.To read more about Best Mortgage Deals, click here.
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