2 min read
Definition
A tracker rate is a variable rate that follows a stated benchmark — usually the Bank of England base rate — by a fixed margin. If the base rate rises 0.25%, a base-plus-3% tracker rises to base-plus-3% at the new base, so your rate moves exactly with the benchmark. Unlike an SVR, there is no lender discretion.
In plain terms
What the benchmark does, your rate does — no surprises, but no protection from rises either.
Why it matters for your company
A tracker is transparent but exposes you fully to rate rises — stress-test before choosing one. See rate pass-through and fixed vs variable.
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Bank of England base rate
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Standard variable rate (SVR)
A standard variable rate (SVR) is a lender’s own default rate, set at its discretion, that a facility falls…
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Rate pass-through
Rate pass-through is how much of a benchmark change actually reaches your loan rate — full on a tracker,…
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Advance rate
The advance rate is how much of an asset's value a lender will lend against — 80% of invoices, say. The gap…
Read →Funding for UK limited companies
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