Fixed and Variable rate mortgages

Fixed and Variable rate mortgages, what's the difference?

We offer two different mortgage interest rate options: ‘Variable’ and ‘Fixed’. 

Your mortgage adviser or intermediary will discuss your needs and circumstances with you before recommending the most suitable mortgage for you. They will give you a Mortgage Illustration that sets out the loan’s total cost, any fees and essential information about the product(s) you're interested in.

 

Variable rate mortgages

A variable rate mortgage means that the interest rate may change throughout the duration of your loan, this means it could go up or down, which may result in changes to your monthly payments.

Standard Variable Rate (SVR)

We set our own Standard Variable Rate (SVR), but it is influenced by a number of factors, including the Bank of England base rate. You can find more information about these factors in the Mortgage Terms and Conditions.

If we change our SVR, and all or part of your mortgage is on a variable or discounted rate, we’ll write to you before your next payment is due, letting you know your new rate and your new monthly payment. 

Discounted mortgages

We offer discounted mortgages, which is where the interest rate is set at a discounted rate off our SVR for a fixed period of time. If our SVR changes, then your discounted rate will also change, as it is a variable rate mortgage. 

For example, if our SVR is 6% and your discount is -2.5%, you'll pay a rate of 3.5%. If our SVR decreases to 5.75%, you will pay a rate of 3.25%.

If we change our SVR, we’ll write to you before your next payment is due, letting you know your new rate and your new monthly payment.

When the discounted rate period ends, your mortgage will transfer to our Standard Variable Rate (SVR). We will recalculate your monthly payment to reflect any change to the interest rate and write to you before the discounted rate ends letting you know your new monthly payment and your options.

 

Fixed rate mortgages

Fixing your interest rate for a set period guarantees that your rate will not go up or down during this time, even if the Bank of England base rate changes, meaning your monthly payments won't change during the fixed rate period.

When the fixed rate term ends, your mortgage will transfer to our Standard Variable Rate (SVR). We will recalculate your monthly payment to reflect any change to the interest rate and write to you before the fixed rate term ends letting you know your new monthly payment and your options.

Take a look at our current mortgage deals

 

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE