Tracker Rate
-
A "tracker rate" refers to a variable interest rate which is a fixed percentage above, or below, some other rate that it tracks, for example the Bank of England's base rate or Barclays Base rate. The tracking applies to some loans for a specified period of time and to others for the duration of the loan.
Having a loan based on a tracker rate of interest means that when the rate that it tracks goes up or down so will the monthly payments.
After the end of the tracker rate period, if tracking does not apply to the whole term of the loan, the lender's standard variable rate of interest will usually apply to the loan for the rest of the term. The monthly payments can be the same as, higher or lower, than during the tracking period, depending on whether the tracker rate at the end of the tracking period was higher or lower than the lender's standard variable rate of interest. |
