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  4. Mortgages - Bank of England Base Rate Change - 11th March 2020 and 19th March 2020

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Mortgages - Bank of England Base Rate Change - 11th March 2020 and 19th March 2020

1 - What is the Bank of England base rate?
It is the official Bank Rate set by the Bank of England and it affects the interest rates offered by Banks, Building Societies and other financial institutions. By changing the official Bank Rate, the Bank of England seeks to influence overall borrowing in the economy.

The Bank of England base rate can go up or down and is announced at the Bank of England’s Monetary Policy Committee (MPC).

On 11th March 2020 the Bank of England base rate decreased from 0.75% to 0.25%. Then on 19th March 2020 the Bank of England base rate decreased again, this time from 0.25% to 0.10%.

For our Mortgage customers on Tracker rates, your overall mortgage interest rate will decrease by 0.50% effective from 1 April 2020 and will decrease by a further 0.15% effective from 1 May 2020.

The Co-operative Bank's Standard Variable Rate will decrease from 4.99% to 4.49% effective from 1 April 2020 and from 4.49% to 4.34% effective from 1 May 2020. 

2 - How will I know if I am affected by this change?
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.

3 - How does the Bank of England base rate affect my mortgage?
Tracker mortgage - If you have a Co-operative Bank or Britannia tracker mortgage the interest rate will track the Bank of England base rate, and rise and fall in line with that in accordance with your terms and conditions or offer letter. If your product has a floored rate, your mortgage interest rate will not fall below that rate stated in your terms and conditions.

Standard variable rate mortgage - If you have a Co-operative Bank or Britannia standard variable rate mortgage, the interest rate is not directly linked to the Bank of England base rate, but may change if the base rate changes. The Co-operative Bank’s Standard Variable Rate will decrease from 4.99% to 4.49% effective from 1 April 2020 and from 4.49% to 4.34% effective from 1 May 2020.

Fixed rate mortgage - If you currently have a Co-operative Bank or Britannia fixed rate mortgage, your interest rate does not change and your monthly payments will remain the same until the end of your fixed rate interest period. When your fixed rate ends we will contact you to inform you of your new interest rate and monthly payment.

4 - Has the full increase been passed onto my Tracker Mortgage Rate?
Yes, the increase will be passed on as stated in your terms and conditions.

5 - Will I receive new paperwork?
No, the change of rate does not affect your terms and conditions.

6 - Will the rate be reflected in my Mortgage Statement?
Yes, the new rate will be reflected in your next statement following the rate change.

7 - When will the tracker rate change be effective from?
The rates will be made effective for existing tracker customers on the 1 April 2020. 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.

8 - Will my Direct Debit be changed automatically?
• If you pay by variable Direct Debit you do not need to do anything.
• If you pay by any other means then you will need to amend your payment to us.
• If you have fixed your Direct Debit for a specific amount; you should ensure that the amount is sufficient to pay at least the amount of your contractual monthly payment. As your mortgage payment could decrease from 1 April 2020 and again from 1 May 2020, you may want to decrease the amount of the payment accordingly, to ensure you’re not paying more than you want to. Paying more than the amount we require is classed as an overpayment and overpayments above a certain amount can incur early repayment charges. As your mortgage payment could be increasing from 1 April 2020 and potentially again from 1 May 2020, you may have to increase the amount of the payment accordingly, to ensure it is sufficient. Paying less than the amount we require may result in your account falling into arrears. Please remember that we are unable to change any fixed Direct Debit without your instruction. We will send all impacted customers a letter to individually explain how your mortgage payment will be changing from 1 April 2020 and 1 May 2020, and how you can adjust your payment accordingly.
• You can contact us on 08000 288 288. Lines are open from 8am to 8pm Monday to Friday, and from 9am to 1pm on Saturday.

9 - Will my new Direct Debit payment include my existing overpayment amount?
Yes, however if your mortgage payment will be decreasing from 1 April 2020 and potentially again from 1 May 2020, you may want to decrease your Direct Debit if you wish to maintain your same overpayment amount.

10 - Are my payment dates affected?
No, your repayment date remains the same.

11 - I have a Standard Variable Rate, what can I do if I want to change to a different product?
If you are concerned by the decrease to The Co-operative Bank’s standard variable rate should contact us on: +44(0)8000 288 288. Lines are open 08:00 – 20:00 Monday to Friday and 09:00 – 13:00 on Saturdays.

12 - I’m concerned that I won’t be able to afford my repayments
If you are finding it difficult to pay your mortgage and believe you may be facing financial difficulties, please don’t ignore the problem. There are ways we can help. Call us on 08000 288 288 to speak to our expert mortgage team.

13 - My payments have increased more than I was expecting, can you explain why?
Your monthly payment has been re-calculated as a result of a rate change. Your new payment takes into account your current mortgage balance and the remaining term. The payment will reflect the decrease in rate but may have increased by more than you expected due to a number of reasons, including certain fees or charges that have previously been incurred. Your monthly payment was not re-calculated when these fees were originally incurred. These are added to your balance at the time of a rate change.

14 - I’ve seen in the news that there’s been a rate change, I’ve not received anything from you to confirm what this means for my mortgage, can you confirm?
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.


Tracker mortgage - If you have a Co-operative Bank or Britannia tracker mortgage  the interest rate will track the Bank of England base rate, and rise and fall in line with that in accordance with your terms and conditions. If your product has a floored rate, your mortgage interest rate will not fall below that rate stated in your terms and conditions.

Standard variable rate mortgage - If you have a Co-operative Bank or Britannia standard variable rate mortgage, the interest rate is not directly linked to the Bank of England base rate, but may change if the base rate changes. The Co-operative Bank’s Standard Variable Rate will decrease from 4.99% to 4.49% effective from 1 April 2020, and further decrease from 4.49% to 4.34% effective from 1 May 2020.

Fixed rate mortgage - If you currently have a Co-operative Bank or Britannia fixed rate mortgage, your interest rate does not change and your monthly payments will remain the same until the end of your fixed rate interest period. When your fixed rate ends we will contact you to inform you of your new interest rate and monthly payment.

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