On Thursday 5 May the Bank of England base rate increased again from 0.75% to 1.00%. As a result we’re making the following changes from the beginning of June 2022:

  • All Santander and Alliance & Leicester tracker mortgage products linked to the base rate will increase by 0.25%, including Santander’s Follow-on Rate which will increase to 4.25%. 
  • The Standard Variable Rate (SVR) for both Santander and Alliance & Leicester will increase by 0.25% to 5.24%.

These changes are in addition to the Bank of England base rate increases in March 2022, February 2022 and December 2021.

As the Bank of England base rate has increased for a fourth time, you’ll receive 4 separate payment change letters, as your payments will increase 4 times.

If you’re not sure what deal you’re on, or when it ends, you can find out by looking at your mortgage account in our mobile banking app or in Online Banking. If you’ve not got access, you can find this information on your annual mortgage statement.

I’m on a fixed rate mortgage deal, will my payments change?

No. Your monthly payments won’t change. 

I’m on a Santander base rate tracker, FoR, or SVR, will my payments change?

Yes. Your monthly payments will increase, in line with the Bank of England base rate change. 

The new interest rate will be applied to your mortgage account from the beginning of June, but your monthly payments won’t increase until July 2022 onwards. You’ll receive your payment change letter in mid to late June. This will confirm what your new payments will be and you’ll get the letter at least 5 days before the first new payment is due.

I’m on an Alliance & Leicester base rate tracker or SVR, will my payments change?

Yes. Your monthly payments will increase, in line with the Bank of England base rate change.

The new interest rate will be applied to your mortgage account from the beginning of June 2022 and your monthly payments will increase from June 2022 onwards. You’ll receive your payment change letter before the end of May. This will confirm what your new payments will be and you’ll get the letter at least 5 days before the first new payment is due.

How can I find out what my new monthly payments will be?

You can use our mortgage calculator to work out what your new payments could be, before your letter arrives.

How does the Bank of England base rate affect me?

The type of mortgage you have will determine whether you could be affected by a change to the Bank of England base rate.

Follow-on Rate (FoR)

Santander’s Follow on Rate (FoR) will be 4.25% from the beginning of June 2022 (Bank of England base rate plus 3.25%).

Santander’s FoR is a variable rate that all mortgage deals taken on or after 23 January 2018 will automatically transfer to when the initial product period ends. The FoR tracks, and is directly linked to, the Bank of England base rate, so will always move in line with changes to the base rate. This means your interest rate and monthly payments will move up and down as base rate changes.

Find out more about the Santander Follow-on Rate

Standard Variable Rate (SVR)

Standard Variable Rate (SVR) will be 5.24% from the beginning of June 2022 for both Santander and Alliance & Leicester.

SVR is the rate that all mortgage deals taken before 23 January 2018 automatically transfer to when the initial product period ends.

SVR is a managed rate and not directly linked to the Bank of England base rate, so changes to base rate may not always result in a change to the SVR. Other factors can also influence the rate we set.

SVR is a variable rate so payments may move up or down.

Tracker rate mortgage

The interest rate tracks the Bank of England base rate for a set period of time. Your monthly payment will go up or down depending on movements to the base rate, so you need to be sure that you would be able to afford the payments should interest rates increase.

Lifetime Tracker and Flexible Offset mortgages are guaranteed to track the Bank of England base rate for the life of the mortgage.

Fixed rate mortgage

The interest rate is fixed for a number of years, such as two, five or sometimes ten years. Your monthly payments will stay the same, meaning you’ll know exactly what you’ll pay each month over a set period of time.

You’re protected from increases to the Bank of England base rate during the product term. It also means that you won’t be able to take advantage of any potential decreases in the Bank of England base rate during the fixed rate product term.

If you're not sure what type of mortgage you have, you can check your original mortgage offer, annual mortgage statement or the mortgage account details screen in our mobile app or Online Banking

What can I do if I'm worried about how a change in interest rates will affect me?

You can use our mortgage calculator to work out how a change to the Bank of England base rate could affect your monthly payments.

You can use our budget planner to help you get a clearer picture of how much you spend each month. You can then think about where you can make changes, if you need to. 

If you’re coming to the end of your existing deal, are on our Standard Variable Rate or a deal with no early repayment charge you may be considering choosing a new deal. You can change your deal online or over the phone.

If you're still worried about a change in your interest rate and how you will make your monthly mortgage payments, we can help 
 

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