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Existing Customers - Mortgages

Bank of England base rate - Important information

Following the 0.25% rise in the Bank of England base rate we've reviewed our current mortgage rates. With effect from 1st December 2017 Scottish Widows Bank Standard Variable Rate (SVR) has increased by 0.25% to 3.99%.

Bank of England base rate FAQs

We’ve put together the answers to some of the most commonly asked questions about the Bank of England base rate. If you have a question that we haven’t answered here, please call us on 0345 845 8555 (option two). Our lines are open 8am to 6pm Monday to Friday (Wednesday from 10am). Alternatively, you can also send an email to our customer services team if you have a general enquiry.

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

What is the Bank of England base rate?

It’s the official Bank Rate set by the Bank of England and it affects the interest rates offered by Banks, Building Societies and other financial institutions. By changing the official Bank Rate, the Bank of England seeks to influence overall borrowing in the economy.

I’m on a tracker rate, what does this mean for me?

Your mortgage rate will move in line with the Bank of England base rate.

Increase in rate

If the Bank of England base rate increases by 0.5%, your mortgage interest rate will increase by 0.5%. So, for example if the Bank of England base rate increases to 1.00% and your current rate is 1.99% above base rate, your new rate will be 2.99%.

Decrease in rate

If the Bank of England base rate decreases by 0.5%, your mortgage interest rate will decrease by 0.5%. So, for example if the Bank of England base rate decreases to 0.25% and your current rate is 1.99% above base rate, your new rate will be 2.24%.

When will I be notified of the new monthly payment?

You’ll be notified by post of your new monthly payment at least 15 days before your new payment is due to be collected.

If I’m on a tracker rate, when will my monthly payment change if the Bank of England base rate changes?

As you pay your mortgage one month in arrears your monthly payment will change the following month after the Bank of England base rate changes on your account. For example, if the Bank of England base rate changes in May, the rate would take effect from 1 June and your new monthly payment would be debited from your account 1 July.

How do you re-calculate my monthly payments?

When re-calculating your monthly payments, we look at each sub-account separately and change the monthly payment only on sub-accounts affected by the change. This may mean that only some and not all sub-accounts get a monthly payment re-calculation.

When we re-calculate your monthly payment we will not make an assumption that any payments we have not yet received will be made. This means, for repayment mortgages, we re-calculate your payment based on the amount you owe on the day before we do the re-calculation, together with the projected interest charges to the end of that month. If you have not paid your monthly payment before we perform the re-calculation, the balance on which we’ll re-calculate your monthly payment will not take into account the payment that you are expected to make before the month end.

I can’t afford the increase in payments, what can I do?

If you are worried about keeping up with your mortgage payments, please refer to our Facing financial difficulty pages.

You may also want to seek advice on what to do from a free independent advice agency such as the Citizens Advice Bureau and/or the Money Advice Service.

What happens if I’ve made an arrangement with you to pay a different amount?

If you have a fixed overpayment in place this will continue to be collected over and above the new payment.

If your mortgage payment was set at a specific amount this amount will continue to be collected as long as it still covers your full contractual monthly payment. However, if the new contractual monthly payment is higher then we will collect your payment at the higher level. For example, your monthly payment was set at £500 and your contractual monthly payment was £350 (you have been overpaying £150 each month). If the Bank of England base rate change causes your new contractual monthly payment to increase to £550 this is the amount we will collect and you will no longer be overpaying.

Can I change my existing interest rate(s)?

You may be able to change your interest rate(s), however Early Repayment Charges could apply. Refer to your offer for more details.

You can view all our current interest rates, including exclusive rates available to existing customers, on our Scottish Widows Bank website.

Please contact your mortgage adviser in the first instance to discuss further. If you don’t have a mortgage adviser please refer to our find a mortgage adviser web page where you will find details on how to find one.

I’m on a fixed rate, what does this mean for me?

Your rate will not be affected by a change to the Bank of England base rate. The rate is fixed for the duration of the fixed rate period. Refer to your Offer for more details.

I’m on the Standard Variable Rate, what does this mean for me?

The Standard Variable Rate is a rate managed by the Board of Directors here at Scottish Widows Bank. If the Bank of England base rate moves, the Standard Variable Rate will be reviewed but may not change.

If the Standard Variable Rate does change this will take effect on your account from the first of the following month after the announcement. You will be notified in writing the month prior to your new payment being collected.

I have a Mortgage Reserve Account, what does this mean for me?

The Mortgage Reserve Account is an account on the Standard Variable Rate.

The Standard Variable Rate is a rate managed by the Board of Directors here at Scottish Widows Bank. If the Bank of England base rate moves, the Standard Variable Rate will be reviewed but may not change.

If the Standard Variable Rate does change this will take effect on your account from the first of the following month after the announcement. You will be notified in writing the month prior to your new payment being collected.

Why has my monthly payment changed by more than I expected?

This could be for various reasons, which may include one or more of the following:

  • You have taken a ‘payment holiday’ which has resulted in an increase in your mortgage balance.
  • You may have missed payments or underpaid since we last calculated your monthly payments.
  • Costs or charges have been added to your account, such as unpaid ground rent/service charges.

Why has my monthly payment changed by less than I expected?

This could be for various reasons, which may include one or more of the following:

  • You have made overpayments which have reduced your mortgage balance.
  • An additional payment or refund has been made to your account.

Will you change the mortgage rates again?

Mortgages can last for a long time and so it’s likely that interest rates will continue to change from time to time. It’s the responsibility of the Bank of England to instruct changes on the base rate. Scottish Widows Bank will change all tracker rates if the Bank of England changes the base rate and will review the Standard Variable Rate at this point.

How will this interest rate change affect my offset account/benefit?

The benefit amount you receive will change if the offset is currently linked to a mortgage which is on a tracker rate.

If you’re using offset to reduce your payments, this will take three months to come into effect. For example, if your interest rate changes on 1 February your updated offset benefit will be on 1 May.

If you’re using offset to reduce term, this will take 1 month for the change in benefit to take effect.