Tracker Rate

A tracker rate is a variable rate with the interest set just above or below the Bank of England base rate. The margin of interest is defined at the outset and cannot move above or below these margins, therefore 'tracking' the Bank base rate. A tracker rate is subject to the fluctuations of the UK economy and therefore most suited to borrower's who are confident that the bank base rate will fall but are willing to accept the risk that interest rates may also rise.