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How will the changes affect my mortgage?

The Monetary Policy Committee (MPC) met on 2 November 2017 and announced they will be increasing the base rate from 0.25% to 0.5%. All affected variable mortgage rates for existing customers will increase with effect from 1 December 2017. If your mortgage is affected, we will write to you no later than 23 November 2017 to inform you of how the change affects you specifically.

When the Bank of England makes changes to the base rate, this can have an effect on your mortgage, but it depends on the type of mortgage you have:

Different types of mortgage

Variable

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 - see below), we take it into account when we review our rates every month. If we decide to change the rate on your mortgage, we'll let you know no later than 23 November 2017.

See also: If my payment changes, what do I need to do?

Our current variable mortgage rates

The following variable rates for borrowers are effective from 1 December 2017:

Our Standard Variable Rate is 4.74%.

Our Privilege Rate is 4.49%.

Base Rate Tracker

Your mortgage interest rate moves by the same amount and in the same direction as any change to the Bank of England base rate.

Your rate will change on 1 December. If you have a Base Rate Tracker mortgage we’ll write to you and let you know what's happened to confirm the new interest rate no later than 23 November 2017.

Fixed

If your mortgage is on a fixed rate at the time the base rate changes, then your interest rate won't change and your monthly repayments won’t change. The interest rate that you move on to at the end of your fixed term may have changed and we’ll tell you about this when your current deal comes to an end.

If my interest rate is changing, when will you let me know?

If we change the interest rate on your mortgage, we'll let you know no later than 23 November 2017. This gives you time to make sure you have the necessary funds in the account to pay the new amount.

When will my new repayments start from?

If the interest rate on your mortgage changes, your minimum monthly repayments will change from the same month that the new rate becomes effective. For example, if your new rate is effective from 1 December, then your minimum payment for December will change.

If you’ve sent me a mortgage offer, when will I be told about the changes?

If you’ve received an offer from us, we’ll write to tell you about the rate change and any change to your proposed monthly mortgage payment, if applicable. Letters will be sent out from 13 November.

If my payment changes, what do I need to do?

If you pay by:

Direct Debit

Your repayment will change automatically so you don’t need to do anything.

Standing Order

You’ll need to change the repayment amount with your bank/building society.

I have a regular overpayment set up, will this continue if my interest rate changes?

If the interest rate changes and you have 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 mortgage repayment.

I’m having trouble paying my mortgage, where can I go for help?

If you’re having trouble with your mortgage payments, see Payment difficulties to find out how we can help you, as well as details of other organisations that can provide support.

I can afford to pay more every month, can I arrange to make overpayments?

If you can afford to pay more every month, you may be able to make regular overpayments. However, this is dependent on your existing mortgage terms and conditions which may include an early repayment charge.

If you’re thinking about making an extra payment(s) on your mortgage, please call us on 0800 121 8899 to discuss your options.

I have an arrangement in place to clear my arrears, is this affected?

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.

I have a Lifetime mortgage, is this affected?

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:

Fixed Rate

There will be no change. Your interest rate is fixed for the entire term of your mortgage.

Variable rate

A change is possible. The interest rate on your mortgage is ‘variable’ so it can go up or down. However, with this type of mortgage, you’re not making any monthly repayments so any change to the interest rate means that we change the monthly interest we charge on the amount you owe.

What happens if the rate changes on my Offset mortgage?

Your Offset mortgage could be a fixed rate or a variable rate, so this will impact whether or not the rate changes on your mortgage. If the rate changes on your Offset mortgage, the amount of mortgage interest will also change. Any savings held in your Offset savings account will continue to offset the mortgage interest and therefore reduce the mortgage interest you pay.

Find out more: Offset mortgage guide

I am a MOREgage customer, how am I affected?

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 the Bank of England base rate, we take it into account when we review our rates, and we'll write to let you know if there are any changes. 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 will 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 with more information.

What other options do I have?

If your current mortgage deal is coming to an end soon, you may be able to transfer onto a different product with us (subject to your current needs and circumstances, product availability and our lending criteria). Product transfers can be secured up to four months before your current mortgage deal ends. 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.

Additionally, your current mortgage deal may be a product that allows you to transfer onto a different product at any time.

If you’d like to discuss any of your options, call us on 0800 121 8899 where our advisors are ready to recommend the mortgage most suited to your current needs and circumstances.

Please note, we would require the completed transfer documents to be returned to us no later than eight working days before the end of the month to ensure the product transfer takes effect from the first of the following month.  

What does a rate change mean for my mortgage payment protection insurance?

If your monthly mortgage payment has changed, you may want to revisit your mortgage payment protection insurance and find out what your options are.

Existing members

Whether you'd like to borrow more, move home or change your current mortgage, we're here to help.

Help and guides

We’ve got lots of information to help you understand more about our mortgages and lending criteria.

Other information

Read some of the other important information you should know about having a mortgage with us.