The Bank of England base rate is the official interest rate set by the Bank of England’s Monetary Policy Committee. Banks and building societies use the base rate to calculate interest rates for some mortgage products.
The Bank of England base rate last changed on 19 March 2020. It’s currently 0.10%.
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) is currently 3.35% (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)|
Santander and Alliance & Leicester SVR is currently 4.34%.
SVR is the rate that all mortgage deals taken before 23 January 2018 automatically transfer to when the initial product period ends.
The Santander and Alliance & Leicester SVRs are managed rates 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 SVRs. Other factors can also influence the rates we set.
SVRs are variable rates so payments may move up or down.
|Tracker rate mortgage|
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|
You choose to fix the interest rate over 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 Online Banking
What can I do if I am worried about how a change in interest rates will affect me?
Work out how a change to the Bank of England base rate could impact your monthly mortgage payments by using our mortgage calculator
Use our handy budget planner to work out how much you spend each month. You can then consider where you may be able to make a change to your outgoings 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