Bank of England Base Rate and your mortgage

What is the Bank of England Base Rate?

It is the official Bank Rate set by the Bank of England and it influences the interest rates set by Banks, Building Societies and other financial institutions.

If you are currently finding it difficult to pay your mortgage and believe you may be facing into financial difficulties please don't ignore the problem, there are ways we can help.

Your Mortgage Repayments

When the Bank Rate changes this could affect your mortgage payments.

If you have a tracker mortgage that directly tracks the Bank of England Base Rate, the interest rate we charge you will always move in line with changes to the Bank Rate.

If you are paying interest at one of our lender variable rates, your mortgage payments are likely to be affected by changes in these rates. It’s important to note that the changes we make to our lender variable rates may not change in line with or at the same time as the change to the Bank Rate, as other factors can also influence the rates that we set.

If you have a fixed rate mortgage, a change in the Bank Rate will not affect the fixed interest rate during the fixed rate period. However, the interest rate you move to after the fixed rate period ends (the lender variable rate) is variable and therefore could be subject to changes in the Bank Rate.

If part of your mortgage is on a fixed rate and part on a variable rate, any interest rate change will only affect the part of your mortgage on a variable rate.

To help you understand how a change in interest rates might affect your monthly payment, use our rate change calculator to get an idea.

Planning ahead

Making additional payments

While the Bank of England Base rate remains low you may want to consider making additional payments to your mortgage. Making additional payments will reduce the amount you owe and the amount of interest we charge, it could also reduce the impact of future interest rate increases on your mortgage payments. This is because when we work out your new monthly payment we base it on your current mortgage balance, which includes any overpayments you have made. This means the increase in your monthly payment will be less than if you had not made any additional payments.

Fixing your mortgage interest rate

If you would like the security of knowing that your interest rate won’t change for a set period of time, even if Bank of England Base rate and our lender variable rates go up, you could consider switching to a fixed rate mortgage – see our latest products and find out how you can apply.

With some types of mortgage products, there may be an early repayment charge if we agree to transfer all or part of your loan to a new product during the early repayment charge period. You should check your mortgage offer or latest mortgage statement for details of any early repayment charges you may have to pay.

Next steps

What happens when the Bank of England announces a rate change?

  • • Firstly we’ll review our variable rates and decide what changes we will be making
  • • For our existing mortgage customers any change in interest rate will usually take effect from the 1st of the month
      following the Bank of England’s announcement

If your mortgage is affected we will write to you to tell you about the change to your interest rate and monthly
payment ahead of your monthly payment due date. 

FAQs >



Next Steps

Rate change calculator

Use our rate change calculator to get an idea of how much a monthly mortgage payment might change by, following a Bank of England base rate change.

Fixing your mortgage interest rate

Take a look at our exclusive deals for existing mortgage customers

Find out more

Making additional payments

Take a look at your options for making additional payments to your mortgage.

Find out more