Changes to our SVR & FAQs
Following the announcement from the Bank of England that, as part of its ongoing response to the Coronavirus pandemic, it was reducing its Base Rate, we can confirm that:
• Our Standard Variable Rate (SVR) will decrease by 0.50% from 6.20% to 5.70% from 1 June 2020
• Our Buy to Let Variable Rate will decrease by 0.50% from 6.35% to 5.85% from 1 June 2020
Will the base rate change affect me?
If you have a tracker mortgage with the Society, you will see no change to your mortgage payment as we operate with a 3% floor which has already been reached.
If you have a fixed rate mortgage with the Society, your rate will stay the same until the fixed rate period ends.
We’ll be writing to all borrowers who are affected by the change to confirm their rate and new monthly payment.
If you’ve received a letter from us and have questions, please find a list of FAQs below. If you can’t find the answer to your query, please visit our Mortgage FAQs page which covers more mortgage-related topics.
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What is a Standard Variable Rate (SVR)?
A Standard Variable Rate is an interest rate set by a lender that isn’t directly linked to an independent external rate, such as the Bank of England’s Base Rate.
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How have you worked out my new monthly payment?
The way your newly monthly payment is worked out depends on the type of mortgage you have with us and the status of your mortgage account.
If you have a repayment mortgage with us, your new monthly payment is based on your outstanding loan amount, term and interest rate and is calculated to make sure you will have paid off the balance at the end of your mortgage term.
If you have an interest only mortgage with us, your new monthly payment is based on your new rate and outstanding balance. Because you will only pay the interest due, you won’t reduce the amount you owe, so your balance will not change.
If you have a mortgage with us which is in arrears, your payment won’t include the repayment of any outstanding funds owed to us. You’ll need to contact us to arrange to pay these separately if you haven’t done so already.
If you have an agreement with us to pay a different amount, for example, you are currently receiving a mortgage payment concession due to the Coronavirus pandemic, this will continue and will be reviewed as we originally agreed.
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The interest rate on my mortgage has gone down, but my new monthly payment has gone up?
Changes to your interest rate and monthly payments have been calculated using the balance outstanding as at 21/05/2020.
If, at the time of calculation, you had not yet made your normal payment, the balance outstanding will be slightly higher and may have increased your monthly payment.
If this has happened, you can ask us to recalculate your monthly payment once you have paid your May payment. Please get in touch with a member of our team if you would like us to do this for you.
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How does this change affect my regular overpayments?
If you make regular overpayments by standing order, this will not be affected by the rate change. If you combine your overpayment and mortgage payment into a single direct debit or standing order, please contact us on 01282 440500 to ensure we continue to collect the right amount.
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I am currently on a mortgage payment concession, what does this mean for me?
If you have an agreement with us to pay a different amount, for example, you are currently receiving a mortgage payment concession due to the Coronavirus pandemic, this will continue and will be reviewed as we originally agreed.
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Why when the Bank of England reduced rates in March, are your mortgage rates reducing from 1 June?
The changes made by the Bank of England to its Base Rate are part of a range of measures designed to provide support both for the economy and for individuals.
Our discounted rate mortgages are linked to the Society’s managed or reversionary rate, which is not linked to the Bank Base Rate.
When we make changes to the rates on our savings and mortgage products we must balance the rates we pay our savers with the rates we charge our borrowers.
The timing of the changes follows a detailed review of the impact on both our borrowers and savers, with 1 June providing the appropriate time we need to personally notify our customers of the changes.
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The base rate dropped by 0.65%, but you’ve only reduced your SVR by 0.50%. Why?
Our discounted rate mortgages are linked to the Society’s managed or reversionary rate, which is not linked to the Bank Base Rate.
When we make changes to the rates on our products, we must balance the interests of our savers and our borrowers. We have given much consideration to the changes we have made to act in the best interest of both.
Find out how we’re supporting our savers, borrowers and colleagues during the outbreak.
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