On Thursday 2 August, the Bank of England announced a 0.25% increase in the base interest rate. 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.
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.
Yes – we’ll write to them to confirm their new monthly payment five working days before the end of the month.
If your client is on a variable rate mortgage indexed to the base rate or a variable rate, including TMW Managed Rates, your rate will increase by 0.25%. TMW’s Managed Rates continue to be competitively priced compared to the variable rates in the market and offer a high level of flexibility. In most cases you will also have the option to switch to a new mortgage deal.
All mortgage tracker KFI and offer documents will reflect the new Bank of England base rate from Tuesday 7 August.
For new customers completing on trackers from this date, the new base rate will be reflected upon completion.
We’ll use your client’s outstanding balance, along with their new interest rate to calculate their new monthly payment. The total amount they owe will be distributed over the months remaining until their mortgage end date.
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.
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.
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.
If they are currently paying by Direct Debit then this will automatically be changed and they don't 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.