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

On 11 March 2020 the Bank of England base rate decreased from 0.75% to 0.25% and on 19 March 2020 further decreased from 0.25% to 0.10%. Our Standard Variable Rate decreased from 4.99% to 4.49% effective from 1 April 2020 and further decreased from 4.49% to 4.34% effective from 1 May 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 decreased by 0.50% effective from 1 April 2020 and decreased by a further 0.15% effective from 1 May 2020.

Our Standard Variable Rate decreased from 4.99% to 4.49% effective from 1 April 2020 and further decreased 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. Our Standard Variable Rate decreased from 4.99% to 4.49% effective from 1 April 2020 and further decreased from 4.49% to 4.34% effective from 1 May 2020.

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

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 terms and conditions?
No. The change of rate does not affect your terms and conditions.

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

7 - When will the Tracker rate change be effective from?
The new interest rates took effect for existing Tracker customers on 1 April 2020. For the second base rate reduction announced on 19 March, the new interest rate for existing Tracker customers took effect from 1 May 2020. If your mortgage is affected we have written 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 decreases from 1 May 2020, you may want to decrease your direct debit if you wish to maintain your same overpayment amount.

10 - Is my payment date affected?
No. Your payment 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 our Standard Variable Rate, 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 – Why have my payments increased more than I was expecting?
Your monthly payment has been re-calculated as a result of a change to interest rates. Your new payment amount takes into account your current mortgage balance and the remaining term. The payment amount will reflect the decrease in interest rate but may also include certain fees or charges that have not 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 an interest rate change.

14 - I’ve seen in the news that there’s been a base rate change, but have not received a letter from the Bank.
If your mortgage is affected we have written to you to tell you about the change to your interest rate and monthly payment amount 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. Our Standard Variable Rate decreased from 4.99% to 4.49% effective from 1 April 2020, and further decreased from 4.49% to 4.34% effective from 1 May 2020.

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

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