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Bank of England Base Rate Changes
What happens if the Base Rate goes up or down?
Supporting you when interest rates change
Changes to the Bank of England Base Rate will impact your payments if you have a variable rate or tracker rate mortgage.
Current rates:
The Bank of England Base Rate is 4.75%.
- The Standard Variable Mortgage Rate is 6.75%.
- The Homeowner Variable Rate is 8.24%.
- The Buy-to-Let Variable Rate is 9.09%.
- The Follow-on Tracker Rate is 7.24%.
(Rate applies to existing customers from 1 December 2024)
What is the Bank of England Base Rate?
The Base Rate is the official interest rate set by the Bank of England. When the Bank of England decides to change the official interest rate, this can have an effect on your mortgage payments.
What will happen to my mortgage if the rate changes?
The impact of any change will depend on the type of mortgage you have, the amount you’ve borrowed and how long you’ve taken it out for. If any part of your mortgage is on one of our variable rates and your rate changes following a change to the Bank of England Base Rate, your payment may go up or down. If this happens, we’ll write to you confirming your new payment.
If you’re worried about how a change in interest rate might affect you, the first thing to do is check what type of mortgage you’re on:
Currently on Standard Variable Rate (SVR)? |
Find out more about our Standard Variable Rate. |
|---|---|
Currently on Homeowner Variable Rate (HVR)? |
Find out more about our Homeowner Variable Rate. |
Currently on Buy-to-Let Variable Rate (BVR)? |
Find out more about Buy-to-Let Variable Rate. |
Currently on a Tracker Mortgage? |
A tracker mortgage is a variable rate mortgage. The difference between these and other variable rate mortgages is that they follow, or track, the movements of another rate, most commonly the Bank of England Base Rate. If your mortgage is affected by the rate change, we will write to confirm your new payment. Any change in interest rates will usually take effect within 30 days of the Bank of England’s announcement. |
Currently on a Fixed Rate Mortgage? |
If you’re on a fixed-rate mortgage your payments will stay the same for the fixed-rate period, as the rate you’re 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 Bank of England base rate could go down during the fixed rate period |
The table below may help you to understand how an increase in interest rates could affect your monthly payments. The numbers are for illustrative purposes only.
Customers with an Interest Only Mortgage
Total borrowed |
Term |
Interest rate increase |
Monthly payment increase |
|---|---|---|---|
£10,000 |
5 years |
0.50% |
£4.17 |
£50,000 |
10 years |
0.50% |
£20.83 |
£125,000 |
15 years |
0.50% |
£52.08 |
£200,000 |
20 years |
0.50% |
£83.33 |
Customers with a Repayment Mortgage
| Total borrowed | Term | Interest rate increase | Monthly payment increase for SVR customers | Monthly payment increase for HVR customers |
|---|---|---|---|---|
| £10,000 | 5 years | 0.50% | £2.36 | £2.41 |
| £50,000 | 10 years | 0.50% | £12.88 | £13.37 |
| £125,000 | 15 years | 0.50% | £34.94 |
£36.62 |
| £200,000 | 20 years | 0.50% | £60.02 | £63.27 |
Do I need to take any action?
If you have a variable rate mortgage which is impacted by the rate change, we’ll write to you to let you know what your new monthly payment will be and what action you need to take. The letter will arrive before your monthly payment changes.
Payments by standing order
If you pay your mortgage by standing order, you’ll need to contact your bank to amend the amount from the date shown on your rate change letter. Unfortunately this can’t be done by us on your behalf, so you may find it easier to pay by Direct Debit instead.
Payments by Direct Debit
If you pay your mortgage by Direct Debit there’s no need to take any action. The new amount will be collected as usual.
Payments by cash or cheque
If you pay your mortgage by cash or cheque, simply adjust the amount(s) that you send to us each month.
What if I’m on a payment holiday?
If you’re on an agreed payment holiday, the new interest rate will be applied to your account from the date shown on your rate change letter. Once your payment holiday comes to an end, the revised payment amounts will apply.
Worried about making your repayments?
If your payments have increased and you don’t think you’ll be able to make them, please tell us as soon as possible so we can find the best way to support you. You can call us on 0345 835 3374. Lines are open from 8.00am – 7.30pm Monday to Friday (excluding bank holidays) and from 8.00am – 12.30pm on Saturdays.
Regular overpayments
If you currently make an overpayment, we'll continue to collect the same extra amount as we do currently on top of your new monthly payment.
If you would like to start, change or cancel a regular overpayment, you can do this by using the form below. You'll need your mortgage account number, which can be found on your mortgage statement or other mortgage related letters.
Download, print and post the form below:
Frequently Asked Questions
We have changed some or all of our variable mortgage interest rates because there has been a change to our cost of lending or we know that our cost of lending is about to change. There are a number of reasons why our cost of lending can change and they include a change in Bank of England base lending rate or a change to laws and regulations that impact our costs.
If you have a tracker rate, the change will be because the rate automatically follows the Bank of England base lending rate.
Simply adjust the amount you send us each month to the new total monthly payment shown above. Please remember, if you are sending in a payment by cheque, make sure the payee is shown as 'TSB Bank plc', followed by either your name or your mortgage account number.
You do not need to make any payments during the period of your 'Payment Holiday'. However the new interest rate will be applied to your account from the date shown above. Once the arrangement comes to an end, the revised payment shown will apply.
If the amount you are required to pay has changed please contact the relevant Benefits Agency or the Payment Protection policy provider direct to notify them of the change.
This may be for one or more of the following reasons:
- You have recently taken a 'Payment Holiday' in which case the balance of your mortgage will have increased.
- You may have transferred funds, or had a refund made from a sub-account, which would affect the mortgage balance used to calculate the new monthly figure.
- Your chosen payment date may be on a day in the month other than the 1st. In this case, the mortgage balance used to calculate your new payment will not take into account your next mortgage payment.
A fee may have been added, for example a conversion or interest certificate fee, to your Fees and Charges sub-account (99).
If you’re paying interest at one of our lender variable rates you may be able to transfer to a different mortgage product.
- Visit tsb.co.uk/mortgages/existing-customers/ to find out information about our mortgage products and ways that you can apply
If you're having trouble paying your mortgage, there are a variety of options available that may ease your situation and ultimately help to resolve the issue. Further information can be found here.
There are a number of reasons why your payment may have gone up even though the base rate has gone down
- When rates change from the 1st of the month, then we deduct your next monthly payment – at the new interest rate – from the mortgage balance used to calculate your new monthly payment. However, when our rates change on a day other than the 1st of the month, then we can’t always do this. This means the balance we use to calculate your new monthly payment may be a little higher than expected and so the revised monthly payment a little higher as well. But rest assured, we’re still using the new interest rate to calculate your new monthly payment
- If you are on a repayment mortgage, and there’s not long to go until your mortgage ends, your monthly payments may have increased to make sure you pay off everything you owe at the end of your mortgage.
- You may have or recently had a payment holiday and your monthly payments have increased to make sure you remain on track to pay off everything you owe by the end of your mortgage term. If you’re currently on a payment holiday you don’t need to take any action.
