When the Bank of England makes changes to the base rate, this can affect your mortgage, but it depends on the type of mortgage you have:
Base Rate Tracker
The interest rate is tracked against the Bank of England Base Rate (BBR). This means that your interest rate increases and decreases in line with any changes to BBR, unless it has a ‘floor’ or a ‘cap’ that’s already been reached.
Following any Base Rate announcement we review all tracker rates on the 15th of the month, and will notify you at least five working days before the end of the month to tell you of any changes that will be made to your monthly mortgage payment. These changes will be effective from the 1st of the following month. If the Bank of England announce a rate change after the 15th of the month any variable rate changes will be reviewed on the 15th of the following month.
Your monthly repayments stay the same for a fixed length of time. If your mortgage is fixed at the time of the Base Rate changes, your interest rate and your monthly repayment won't change.
However, when your fixed rate comes to an end it may revert on to a variable rate, for example our Standard Variable Rate (SVR), so your rate may change. We’ll advise you of your follow on rate when your current mortgage deal comes to an end as variable rates may go up or down.
As interest rates change, your monthly payments can also change and your mortgage may be affected. Although the interest rate on your mortgage isn't directly linked to the Bank of England Base Rate (unless it is a Base Rate Tracker) we take BBR changes into account amongst a number of other factors when we review our rates. If we decide to change the rate on your mortgage, we'll let you know at least five working days (excluding Bank Holidays) before the change takes effect.
If you pay by:
Your repayment will change automatically so you don't need to do anything.
You'll need to change the repayment amount with your bank/building society.
If the interest rate changes and you’ve set up a regular overpayment (for example, you pay a fixed amount above your regular monthly mortgage repayment), we'll continue to collect this from you along with your updated standard mortgage repayment. Depending on how you’ve asked us to set up your overpayment and on how you pay, the amount we collect each month may not change.
It’s a good idea to check your mortgage’s terms and conditions to make sure you’re within your overpayment allowance, if you have one. If you have any questions about your overpayments, please contact us on 0800 121 6263.
If you can afford to pay more every month, you may be able to make regular overpayments, but it depends on your mortgage.
Check the terms and conditions because there may be early repayment charges. If you're thinking about making an extra payment(s) on your mortgage, please call us on 0800 121 6263 to discuss your options.
If you've arranged to pay an extra amount each month to help clear your arrears, you'll continue to pay this, no matter what happens with the Base Rate. If you want to change your repayment plan, call us on 0800 121 8765.
If you have a temporary agreement with us to pay less than your contractual monthly repayment, please continue to pay this until our Collections team contacts you.
If the interest rates change, it may have an impact on your Lifetime mortgage, but it depends on the type of Lifetime mortgage you have with us:
There will be no change. Your interest rate is fixed for the entire term of your mortgage.
The interest rate on your mortgage is 'variable' ‐ it can go up or down. However, with this type of mortgage, you're not making any monthly repayments: any mortgage advance, interest and charges are repaid from the sale of your home when you move into permanent long term care (including sheltered accommodation), the property is no longer your main residence, or you die.
Any change to the interest rate means that we change the monthly interest we charge on the amount you owe.
Interest rate changes and Offset mortgages
If the rate changes on your Offset mortgage, any savings held in your Offset savings account will continue to reduce the mortgage interest you’re charged.
Find out more: Offset mortgage guide
If your MOREgage is on a variable rate then your interest rate may change. Although the interest rate on your mortgage isn't directly linked to BBR, we take it into account when we review our rates, and we'll write to let you know the details. If your MOREgage is on a fixed rate then your interest rate will not change.
If you have an Unsecured Personal Loan (UPL) linked to your MOREgage account, a rate change may affect you. If the mortgage element is variable (i.e. on our Standard Variable Rate) the mortgage may move in line with any rate changes, however if it is on a fixed rate then your interest rate will not change. If any changes happen, we will write to you at least five working days before they come into effect.
If your current mortgage deal is coming to an end soon, you may be able to transfer onto a different product (subject to your current needs and circumstances, product availability and lending criteria). You may also wish to discuss your options with us following the rate change. As an existing customer, you can apply to transfer to any mortgage from our current range and take advantage of the same competitive products as new customers up to four months in advance of their product maturing.
Additionally, your current mortgage deal may be a product that allows you to transfer onto a different product at any time.