• Bank of England Base Rate change

    What happens if the Base Rate goes up or down?

     

  • YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

    Supporting you when interest rates change

    The Bank of England Base Rate has been consistently low for a number of years. But if it changes, this’ll have an impact on your mortgage payments if you have a mortgage linked to this rate.

    Current rates:

    The Bank of England Base Rate is 0.25%.


    What is the Bank of England Base Rate?

    The Base Rate is the official interest rate set by the Bank of England. When the Bank of England decides to change the official interest rate, this can have an effect on your mortgage payments. 


    What will happen to my mortgage if the rate changes?

    The impact of any change will depend on the type of mortgage you have, the amount you’ve borrowed and how long you’ve taken it out for.  If any part of your mortgage is on one of our variable rates and your rate changes following a change to the Bank of England Base Rate, your payment may go up or down.  If this happens, we’ll write to you confirming your new payment (unless you’re on the Annual Instalment Review scheme - find out  more below).

    If you’re worried about how a change in interest rate might affect you, the first thing to do is check what type of mortgage you’re on:

  • Currently on Standard Variable Rate (SVR)? Find out more about our Standard Variable Rate.
    Currently on Homeowner Variable Rate (HVR)? Find out more about our Homeowner Variable Rate.
    Currently on Buy-to-Let Variable Rate (BVR)? Find out more about Buy-to-Let Variable Rate.
    Currently on a Tracker Mortgage? A tracker mortgage is a variable rate mortgage. The difference between these and other variable rate mortgages is that they follow, or track, the movements of another rate, most commonly the Bank of England Base Rate. If your mortgage is affected by the rate change, we will write to confirm your new payment. Any change in interest rates will usually take effect from the first of the month following the Bank of England’s announcement.
    Currently part of the Annual Instalment Review (AIR) scheme? If you are in the Annual Instalment Review scheme, where your monthly mortgage payment changes just once each year, the overall effect of any rate changes during the year will be taken into account at the next annual review. We’ll let you know your new payment for the next 12 months when we send you your annual mortgage statement.
    Currently on a Fixed Rate Mortgage?
    If you’re on a fixed-rate mortgage your payments will stay the same for the fixed-rate period, as the rate you’re paying does not move in line with the Bank of England Base Rate. The benefit of a fixed rate is that it removes the uncertainty of the rate going up; of course the Bank of England base rate could go down during the fixed rate period


    If you’re concerned about the impact of significant interest rates changes in the future, please contact one of our qualified Mortgage Advisors who’ll be able to discuss your options. Please call 0800 056 1088. Lines are open from 8am – 8pm Monday to Friday and 9am – 4pm on Saturdays.

    The table below may help you to understand how an increase in interest rates could affect your monthly payments. The numbers are for illustrative purposes only.

    Customers with an Interest Only Mortgage

    Customers with an Interest Only Mortgage
    Total borrowed Term Interest rate increase Monthly payment increase
    £10,000 5 years 0.25% £2.08
    £50,000 10 years 0.25% £10.42
    £125,000 15 years 0.25% £26.04
    £200,000  20 years 0.25% £41.67


    Customers with a Repayment Mortgage

    Customers with a Repayment Mortgage
    Total borrowed
    Term
    Interest rate increase Monthly payment increase for SVR customers
    Monthly payment increase for HVR customers 
    £10,000 5 years 0.25%  £1.10 £1.13
    £50,000 10 years 0.25%
    £5.71 £5.96
    £125,000  15 years 0.25%
    £14.79 £15.73
    £200,000
    20 years 0.25% £24.53 £26.50


    Do I need to take any action?


    If you have a variable rate mortgage which is impacted by the rate change, we’ll write to you to let you know what your new monthly payment will be and what action you need to take. The letter will arrive before the change takes effect, usually on the first day of the month following the announcement of the change.


    Payments by standing order

    If you pay your mortgage by standing order, you’ll need to contact your bank to amend the amount from the date shown on your rate change letter. Unfortunately this can’t be done by us on your behalf, so you may find it easier to pay by Direct Debit instead.


    Payments by Direct Debit

    If you pay your mortgage by Direct Debit there’s no need to take any action. The new amount will be collected as usual.


    Payments by cash or cheque

    If you pay your mortgage by cash or cheque, simply adjust the amount(s) that you send to us each month.


    What if I’m on an instalment or payment break?

    If you’re on an agreed Instalment Break or Payment Break, the new interest rate will be applied to your account from the date shown on your rate change letter. Once your break comes to an end, the revised payment amounts will apply.



  • Worried about making your repayments?

    If your payments have increased and you feel that you’re unable to meet them, please contact our team on 0345 835 3374, where full support will be available.


  • Base Rate Change Letters

    We are mailing our mortgage customers to tell them how the Bank of England base rate change affects their monthly payments. Please read our frequently asked questions

icon

Tap

Do your banking wherever you are with secure online banking services.

Download our app

icon

Click

Bank online 24/7 using our Internet Banking website or our mobile app.

Internet Banking

icon

Call

Bank over the phone 24/7 using our automated service - call 03459 758 758.

Telephone Banking

icon

Visit

Find your nearest branch or cash machine using our Branch Locator tool.

Find branches