Bank of England Base Rate FAQs

Today, Thursday 4 August, the Bank of England decreased the base rate from 0.50% to 0.25%. This means your client's mortgage rate and subsequent monthly payments may be affected, depending on the type of mortgage they have. Please see our FAQs below for more information.

My client is currently completing their new mortgage, will the announcement affect them?

If your client has chosen a tracker mortgage, their rate may change as a result. We’ll write to them to confirm their new rate before their first payment.

Customers on products linked to the Bank of England base rate will see their interest rate decrease by 0.25%.

The change will come into effect on Thursday 1 September for existing customers and they will receive a rate change notification letter stating their new rate and monthly payment before this date.

My client is on a fixed rate but their product is coming to an end this month, will they receive a letter?

Yes – we’ll write to them to confirm their new monthly payment five working days before the end of the month.

My client is on a Managed Rate, why isn’t their payment reducing?

As the TMW Managed Rates are not linked to the Bank of England base rate, we’ve made the decision not to reduce it at this time. TMW's Managed Rates continues to be competitively priced compared to the variable rates in the market and offers a high level of flexibility. In most cases, your clients also have the option to switch to a new mortgage deal. If they've received a letter confirming a change to their existing mortgage product, below are some questions and answers that might be useful.

My client is on a Managed Rate, are they eligible to switch to a new deal?

If your client is a TMW customer, please refer them to to check that they are eligible for a new product.

Unfortunately we do not currently offer switcher products for DHLL and EMEX customers.

How does the Base Rate change impact customers applying for new trackers?

All mortgage tracker KFI and offer documents will reflect the new Bank of England Base Rate from Wednesday 10 August. All customers completing with trackers after this date will benefit from the new Base Rate from completion.

How will you work out my client's new monthly payment amount?

Your client's outstanding loan amount and interest based on their new rate will be recalculated so that the total amount they owe is evenly distributed over the months remaining until their mortgage end date.

My client's payment has changed, but can they continue to make overpayments?

Yes, if they’ve extra money available, it could be worthwhile paying as much as they can afford each month.

If they have a mortgage where an Early Repayment Charge applies, this will also apply if they make an overpayment of more than the overpayment allowance. So please refer them to their annual mortgage statement or their original mortgage offer to check their limit.

My client's been making regular overpayments, why hasn’t the term of their mortgage changed?

Unless they specifically ask for their term to be changed, we’ll continue to calculate payments to repay the mortgage over the agreed term. Any overpayment they've made has reduced the balance of the mortgage and this has reduced the interest they're paying.

Why haven’t the rates on all my client's mortgage accounts changed?

If your client has more than one account, their rate on other accounts may not change because they may have a fixed rate on their account, which won’t change until the end of their product term or they are on one of our Managed Rates.

Will my client's monthly mortgage payment automatically change to the new amount?

If they are currently paying by Direct Debit then this will automatically be changed and they do not need to do anything. However, if they are paying by any other method, including Standing Order, they will need to change the amount they pay with their bank so that it covers the new monthly commitment.