This product ‘tracks’ another interest rate and moves directly in line with it. For most this will be the Bank of England Base Rate. So, if the Base Rate rises by 0.5%, so will the Tracker Rate. Some track other financial indices, such as LIBOR (London Interbank Offered Rate).
This rate also tends to have terms of 2,3 or 5 years, although longer terms are sometimes available.
As you will be tracking another interest rate the payments are likely to fluctuate, meaning it will be more difficult to budget for your mortgage payments. There are normally start-up cost fees charged by the lender, and you are likely to be charged an Early Repayment Fee if you cancel your contract early.