The MPC met on Thursday 2 August 2018 and announced they will be increasing the Base Rate from 0.5% to 0.75%. All affected variable mortgage rates for existing customers will increase with effect from 1 September 2018. We will write to all affected customers no later than 23 August 2018 to inform them of how the change affects them specifically.
The Flexx for Term product rates will be increasing by 0.25% along with all of our variable mortgage rates.
We continually review our rates to make sure they are competitive and offer great value for our customers. If we change our new business products we'll let brokers know. As always, we'll give the usual 48 hours' notice.
Yes, our SVR and Privilege rate will also each be increasing by 0.25%.
Any change that we make to variable mortgage rates for existing borrowers will be applied from 1 September.
We'll write to all affected borrowers no later than five working days before the effective date, 1 September. The letter will include details such as their new rate and monthly repayment and also confirm the effective date.
If the rate on an Offset mortgage changes, any benefit from Offset savings held effectively moves in line. This is because the savings held in the Offset savings account are linked to the mortgage account and are used to reduce the amount of mortgage interest paid.
When the Bank of England makes changes to the Base Rate, this can have an effect on their mortgage, but it depends on the type of mortgage they have:
Their mortgage may be affected. Although the interest rate on their mortgage isn't directly linked to the Bank of England Base Rate (unless it is a Base Rate Tracker - see above), we take it into account amongst a number of other factors when we review our rates every month. If we decide to change the rate on their mortgage, we'll let them know at least five working days (excluding Bank Holidays) before the change happens.
The interest rate moves in line with the Bank of England Base Rate.
The rate will change on the first day of the month following an announcement about changes to the Base Rate. If they have a Base Rate Tracker mortgage we’ll write to them at least five working days (excluding Bank Holidays) before the change happens.
If their mortgage is on a fixed rate at the time the Base Rate changes, then the interest rate won't change and neither will their monthly repayments. The interest rate that they revert to at the end of their fixed term may have changed. We’ll advise them of this when their current deal comes to an end.
If we change the interest rate on their mortgage, we'll let them know at least five working days (excluding Bank Holidays) before this happens. This gives them time to make sure they have the necessary funds in the account to pay the new amount.
If the interest rate on their mortgage changes, their minimum monthly repayments will change from the same month that the new rate becomes effective. For example, if their new rate is effective from the first of the month, then their minimum payment for that month will change.
If they pay by:
Their repayment will change automatically so they don't need to do anything.
They’ll need to amend the repayment amount with their bank/building society.
If the interest rate changes and they have set up a regular overpayment (for example, they pay a fixed amount above their regular monthly mortgage repayment), we'll continue to collect this along with their updated mortgage repayment.
If they can afford to pay more every month, they may be able to make regular overpayments. However, this is subject to their existing mortgage terms and conditions which may include an early repayment charge.
If they’re thinking about making an extra payment(s) on the mortgage, they should discuss this either with you, a financial advisor or call us on 0800 121 8899 to discuss their options.
If they’ve arranged to pay an extra amount each month to help clear any arrears, they’ll continue to pay this, no matter what happens with the base rate. If they want to change their repayment plan, they should call us on 0800 121 8765 to discuss this with us, and they may want to seek advice from a financial advisor.
If they have a temporary agreement with us to pay less than the contractual monthly repayment, they must continue to pay this until our Collections team contacts them.
If your client is having trouble with their mortgage payments, we advise that they call us as soon as they can on 0800 121 8765 to find out how we can help them.
If the interest rates change, it may have an impact on their Lifetime mortgage, but it depends on the type of Lifetime mortgage they have with us:
There will be no change. The interest rate is fixed for the entire term of the mortgage.
A change is possible. The interest rate on the mortgage is 'variable', which means the rate may go up or down. However, with this type of mortgage, they’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 owed.
The Offset mortgage could be a fixed rate or a variable rate, so this will impact whether or not the rate changes on the mortgage. If the rate changes on an Offset mortgage, the amount of mortgage interest will also change. Any savings held in the Offset savings account will continue to offset the mortgage interest and therefore reduce the mortgage interest paid.
If the MOREgage is on a variable rate then the interest rate may change. Although the interest rate on the 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 them know if there are any changes. If the MOREgage is on a fixed rate then the interest rate will not change.
If they have an Unsecured Personal Loan (UPL) linked to the MOREgage account, a rate change may affect them. 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 the interest rate will not change. If any changes do happen, we will write to them with more information.
If your client’s current mortgage deal is coming to an end soon, they may be able to transfer onto a different product (subject to their current needs and circumstances, product availability and lending criteria). As an existing customer, your client can apply to transfer to any mortgage from our current range and take advantage of the same competitive products as new customers.
Additionally, their current mortgage deal may be a product that allows them to transfer onto a different product at any time.
They should discuss this with you to get a recommendation on the mortgage most suited to their current needs and circumstances.
Find out more on our product transfer range
And don’t forget, we’ll be paying a proc fee of 0.3% for all Residential as well as Buy to Let product transfers completing after 31 December 2017.
If you have a question that hasn’t been answered here or would like further information on any of the above, give us a call on 0800 121 7788, select option 2 and we'll be happy to help.