Bank of England Base Rate Change
On 11th March 2020, the Monetary Policy Committee (MPC) voted to decrease the Bank of England (BoE) Base Rate from 0.75% to 0.25%, this was further reduced on 19th March to 0.10%
What does this mean for my clients?
We will be reducing the rates for those customers on bank base rate tracker products and we are also reducing our standard variable rate (SVR) to 4.49%.
We are continuing to review how these changes will impact our variable rate mortgages.
The questions and answers below are designed to give you the latest information available.
When will the interest rate change on tracker products?
If your client is an existing customer with a base rate tracker product, their interest rate may decrease on 12 April. Whether their interest rate decreases depends on whether they have already reached the minimum interest rate (floor/collar) on the product.
When will the interest rate change for customers on the standard variable rate (SVR)?
If your client is an existing customer on our standard variable rate, their interest rate will decrease on 19th April.
When will the interest rate change on SVR discount products?
If your client is an existing customer with a SVR discount product, their interest rate may decrease on 19th April. Whether their interest rate decreases depends on whether they have already reached the minimum interest rate (floor/collar) on the product.
When will mortgage payments change?
If your client has a fixed rate mortgage with us, the payment won’t change during the fixed rate period.
If they have a variable rate mortgage, tracker or other mortgage that does not have a fixed rate, any change in payment won’t take effect until their account is reviewed at the end of the year. Any change to their monthly payment will then be applied in March 2021. This means that they will be charged the lower interest rate but their current monthly payment won’t change until March 2021.
What is the Bank of England (BoE) Base Rate?
The BoE Base Rate is the rate of interest that the Bank of England charges banks and building societies when they borrow money. As a result it underpins the way that financial institutions obtain funding to provide mortgage and savings products. Any change to Base Rate, may impact the interest rates on those products.
What is a Bank of England Rate change?
This is when the Bank of England’s Monetary Policy Committee (MPC) determines that – in the best interest of the overall economy - that the Bank of England’s Base Rate needs to be adjusted from its current rate (this can either be an increase or a decrease).
What was the last Bank of England Rate change?
The last time the Bank of England changed Base Rate was 2 August 2018 when it increased from 0.50% to 0.75%
What happens if the Bank of England Base Rate changes again in the future?
We would need to review the impact of any further Bank Rate changes in the context of the market and other economic factors at any such time.
When could the Base Rate change again in the future?
The Base Rate will change when the when the Monetary Policy Committee determines that the UK economy needs to adjust to remain stable and sustainable.
The Bank of England’s Monetary Policy Committee regularly reviews the Base Rate (normally on a monthly basis) to determine whether a change is required.