When a homeowner is shopping for a remortgage there are many decisions to be made.  One of the decisions will be whether to choose a fixed remortgage rate, a tracker, or another type of interest rate such as interest-only.  There is not one type that is better than another only that certain economic conditions and situations of homeowners will make certain types a stronger choice over another.

For homeowners that need to know what to expect with a repayment due to budgeting needs or to remove stress in uncertain economic times a fixed rate may be appropriate.  A fixed rate interest means that for the time period of the loan the homeowner will have set repayments.  No matter what occurs in the economy concerning interest rates the repayment will remain the same.  This is a normally high choice when interest rates are likely to increase or the outcome is uncertain.  In situations where interest rates could fall the homeowner with a fixed rate remortgage would miss out on any possible savings.

A tracker rate remortgage has an interest rate that is not steady but moves up or down according to the decisions on the standard base rate set by the Bank of England’s Monetary Policy Committee (MPC).  The amount the interest rate will go up and down when the MPC increases or decreases their rate is dependent on the individual tracker deal.  Tracker rate remortgages have slight risk since they can increase but they are usually associated with cheaper interest rates than fixed rates. 

Interest-only deals are becoming harder to get and are exactly what they sound like as there are payments made only to the interest costs and nothing paid toward the mortgage debt or principal debt. 

Remortgage deals are as varied as there are homeowner needs and that makes shopping for the right deal all the more important as not all remortgage deals are created equally.