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Base Rate

Here’s everything you should know about the Bank of England Base Rate, how it affects you and what to do when it changes.

What is the Bank of England Base Rate?

This is the interest rate the Bank of England charges on money lent to financial institutions – like us. The Bank of England’s Monetary Policy Committee generally meets once a month and reviews this rate.

Frequently Asked Questions

Why does it matter to me?

What does a Base Rate change mean to my mortgage rate?

Not all mortgage rates are impacted by a change to the Base Rate. Only our Tracker Mortgage is directly linked to the Base Rate – so your interest, and monthly payments, will go up or down in line with the Base Rate.

Mortgage type	Impact of base rate change
Tracker rate	Your mortgage interest rate will change within a day. This will affect the amount of interest you pay.
Fixed rate	No change - the mortgage interest rate will stay the same unti the end of the fixed rate period. When the fixed rate period comes to an end, your mortgage will usually move to our Standard Variable Rate (unless you have arranged to move to another fixed rate or another type of rate).
Standard Variable Rate	No automatic mortgage interest rate change - these rates are not directly linked to the base rate - but we do review these rates whenever the base rate changes.

Have a play with our Interest Rate Change Calculator to see how rate changes might affect what you pay.

Will your Standard Variable Rate change?

What do I need to do if the Bank of England Base Rate changes?

If you have products which are affected by a change in the base rate, we'll always write to let you know what, if anything, you have to do.

If you make your mortgage payment from a non first direct 1st Account you will need to update your standing order with the new amount detailed in the letter we'll send you. If there is an increase in your mortgage payment and you don’t adjust the amount this could result in your mortgage going into arrears.

If you make your mortgage payment from a first direct 1st Account you don’t need to make any amendments to your standing order, we'll take care of that for you and make the changes we detailed within our letter.

Before your letter arrives you may want to know how this could impact your mortgage payment. Have a play with our Interest Rate Change Calculator for an indication, your letter will detail full information.

When will the new rates come into effect following the Bank of England Base Rate change, and when will I see a change in my payments?

As mortgage interest is calculated daily, Tracker rates will change witihin a day of a change to the Bank of England Base Rate, this will be reflected in the next payment taken following the change if the process to take your payment has not already started in our system. If it has, the rate change will take effect from the subsequent payment.

What does the Bank of England Base Rate do to my savings?

How interest rate changes could affect your mortgage

I make mortgage overpayments every month through Standing Order. Do I need to do anything?

If you’ve got a standing order set up to make overpayments via a first direct 1st Account, we won’t make any amendments to this, you can change this at any time please call us on 03 456 100 100.

If you have an interest only mortgage remember it’s your responsibility to ensure your repayment vehicle is still on track to repay your mortgage by the end of the agreed term.

Can I move onto a fixed rate mortgage?

We offer a range of fixed rate mortgages that let you fix your rate – and payments – for a set period. If the Bank of England base rate changes during your fixed rate period, it won’t affect your payments.

If you’d like to move your mortgage to a different interest rate, you have 2 options:

To receive advice on the most suitable first direct mortgages for you, or to change your loan term or amount you can do this over the telephone with one of our Mortgage advisors

If you're happy to choose a rate without receiving advice and you don't want to make any changes such as your term and / or borrowing amount you can do this over the telephone too.

Call us on 03 456 100 236 (Lines are open 8am – 8pm Monday to Saturday and 9am – 8pm Sunday)

If you’re on a Fixed Rate, your interest rate won’t change until the end of the fixed rate period.

I’m worried about my new mortgage payment

You can find lots of helpful information on our website which could help : Budgeting and money worries

If you’re yet to receive our letter containing your new mortgage payment take a look at our Interest Rate Change Calculator to see how rate changes might affect your monthly mortgage payments.

To discuss your mortgage and other options which might be available please call us on 03 456 100 193 (Lines are open 8am – 6pm Monday to Friday and 8am – 4pm Saturday)

Other products

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.