The findings suggest there has been a 67% surge in the popularity of this type of mortgage.
The number of tracker mortgages rose from 118,818 in 2021 to 198,044 by the first quarter of this year.
The data was collected from the Financial Conduct Authority (FCA), via a Freedom of Information request from the wealth manager and financial adviser Quilter.
Two-year deals
The data highlights particularly strong growth in two-year deals, which saw an 87% increase.
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The number of two-year trackers almost doubled from 86,212 in 2021 to 160,787 in 2024.
It follows the Bank of England cutting interest rates for the first time in four years during the summer, with more cuts expected to follow shortly.
The Bank of England governor has said this week that the bank could be “a bit more aggressive” in its approach.
Andrew Bailey said inflationary pressures were less persistent than expected.
However, he raised several ongoing concerns, including the potential threat to prices from oil costs, given the situation in the Middle East.
Longer-term deals
By contrast, longer-term tracker mortgages have seen less interest from borrowers because rates are expected to fall relatively quickly.
The number of three-year tracker mortgages dropped by 66%, from 3,434 to 1,177, while five-year deals decreased by 26%, from 10,457 to 7,777.
Tracker mortgages with 10-year deals experienced modest growth of 4%.
Quilter suggested that this slight increase suggests a “steady, albeit limited interest” in long-term tracker deals.
However, it said that, overall, these types of mortgage products continue to be less popular.
Flexible options
Charlotte Nixon, mortgage expert at Quilter said: “The substantial increase in tracker mortgages, especially those with two-year incentivised rates, highlights a shift in borrower behaviour towards more flexible options and away from the popularity of fixed term mortgages.
“While shorter-term incentives can offer immediate financial benefits, it’s crucial for borrowers to consider the long-term implications and potential interest rate fluctuations.
“Similarly, they need to be mindful of any early repayment charges [ERCs], as what can seem good at the outset can quickly turn out to be less cost-effective.”
She continued: “You also must consider the emotional toll that a tracker mortgage might take on you. If you are prone to worrying about money, then you could find yourself getting overly fixated on the Bank of England bank rate.
“The benefits of a tracker must be weighed against the security of knowing how much you will pay each month.”
