Bank of England base rate change
Announcement made: Thursday 5 November 2009, 12 noon
Bank of England maintains base rate at 0.50%.
What happens when the Bank of England base rate changes?
What happens to my mortgage?
- Existing customers with variable rate mortgages (tracker rate, offset and the C&G standard variable mortgage rate) will automatically benefit from the change and there is no need for you to take any action. Letters will be sent out shortly confirming your new payment details.
- If you are on a tracker mortgage that tracks at or below the base rate it will continue to follow the bank rate until it reaches a product rate of zero.
- If you are in the Annual Instalment Review scheme, where your monthly mortgage payment changes just once each year - the overall effect of any rate changes during the year will be taken into account at the next annual review, and we’ll let you know your new payment for the next 12 months when we send you your annual mortgage statement.
- If you are on a fixed-rate mortgage your payments will stay the same, as the rate you are paying does not move in line with the Bank of England base rate. The benefit of a fixed rate is that it removes the uncertainty of the rate going up, of course the rate could go down.
- If you’re an existing customer on the Standard Variable Mortgage Rate you can get an idea of how much you are likely to pay by using our Mortgage payments calculator.
My payments have changed, what should I do?
- If your payments are going down, you might want to pay a bit extra off your mortgage each month – for example, by leaving your monthly payment unchanged following this rate decrease. It means you’ll pay less interest overall. If you want to do this, let us know by using our simple downloadable pdf form **. You can also use the form if you want to change or cancel any existing extra payments you are already making.
- If you pay your mortgage by standing order, you will need to contact your bank to amend the amount from the date shown on your rate change letter. Unfortunately this cannot be done by us on your behalf, so you may find it easier to pay by Direct Debit.
- If you pay your mortgage by Direct Debit there is no need to take any action, the new amount will be collected as usual.
- If you pay your mortgage by cash or cheque simply adjust the amount(s) that you send to us each month.
- If you are on an agreed ‘Instalment Break’ the new interest rate will be applied to your account from the date shown on your rate change letter. Once your break comes to an end, the revised payment amounts will apply.
- If your payments have increased and you feel that you are unable to meet them please contact our Customer Services Team on 0845 603 1367* who will be able to give you information on the options available.
Can I switch out of my fixed rate?
- Yes, but usually there’s an Early Repayment Charge for coming off of a fixed-rate deal early. It also depends on which deal you have and how much of the fixed-rate period remains. Check your mortgage terms and conditions.
