Interest Rates

If your mortgage offer was dated between 15 February 2016 and 24 March 2021, details about your interest rate can be found below and by reading the relevant sections of the General Mortgage Conditions booklet.

You should read this together with the Second Charge Mortgage Offer sent to you prior to completion and our current General Mortgage Conditions which are available here.

Other than during a Fixed Rate Period the Interest Rate will be a variable rate that is, or is linked to, Optimum Base Rate (“OBR”) specified in the Offer and that we control. We may vary the Interest Rate by varying the OBR in accordance with the Offer and Condition 4 of the General Mortgage Conditions.

We may reduce the OBR for any reason without giving you notice first. If we do not give you notice before the reduction we will do so as soon as possible afterwards, telling you when the change takes effect.

As well as our rights under Condition 4.2 and the provisions of Condition 16.3 of the General Mortgage Conditions, we may increase the OBR to reflect any one or more of the following:

• Changes to the cost of raising the finance to allow us to make loans. These costs will typically be linked to changes in the rate (or rates) used for lending by banks and other financial institutions to each other;
• Changes in the Bank Rate of the Bank of England (or any successor to it);
• Changes in our administrative or other costs in providing loans or running our lending business that are beyond our reasonable control; or
• Changes in legal or regulatory requirements or guidance, or new decisions of the courts or Ombudsmen.

Any increase in the OBR will be proportionate to the reason(s) for the increase.

On each occasion that the Interest Rate changes we will give you at least 7 days’ notice of the change.

If we wish to change the Monthly Payment, we must first give you at least 14 days’ notice of the changed amount. The notice will say when you must start paying the changed amount.

Please contact us if you require further details.

From 1 January 2022, LIBOR is longer a valid reference rate for us to use when setting interest rates. For more information on the discontinuation of LIBOR, see https://www.fca.org.uk/consumers/mortgage-interest-rates-libor

We replaced LIBOR as a factor in determining our costs of funding with Sterling Overnight Index Average (“SONIA”) compounded over a period. SONIA is a reference rate administered by the Bank of England and reflects the average of the interest rates that banks pay to borrow Sterling overnight from other financial institutions or investors. You can find more information on SONIA at https://www.bankofengland.co.uk/markets/sonia-benchmark.

 Changes in SONIA may cause the OBR to increase or decrease, in which case your interest rate will increase or decrease accordingly.

In calculating SONIA and its effect on the OBR we apply what is known as a “credit adjustment spread”. This market-adopted mechanism reduces the economic differences between LIBOR and SONIA, which result from, amongst other factors, the term credit risk premium that is built into LIBOR, but not into SONIA.

You will continue to be provided with advance notice of any change to your monthly payment as a result of a change to the OBR, in accordance with the General Mortgage Conditions applicable to your mortgage.

If you have any questions, please contact our customer service team on 0333 014 3125.