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We understand how important it is to know what your monthly mortgage payments are going to be, especially if your mortgage is linked to the Bank of England (BOE) Bank Rate or our Standard Variable Rate (SVR) and there's a change.

We've put together this simple explanation of our Standard Variable Rate, the Bank of England Bank Rate and how they might affect you.

Standard Variable Rate (SVR)
What is a Standard Variable Rate?

This is the rate of interest set by your lender on a mortgage. This rate may go up, for the reasons stated in the lender's terms and conditions, or down at the lender's discretion. Changes will usually (but not always) be due to changes in the Bank of England Bank Rate, often referred to as the Base Rate. The SVR is the lenders normal interest rate without any discounts or deals. Principality's SVR is currently 4.74% variable.

What happens to my mortgage if your SVR goes up or down?

This will depend on the type of mortgage you hold:

I’m on a Fixed Rate Mortgage.

If you are on a Fixed Rate Mortgage, your monthly payments will stay the same until you reach the end of your special rate. During this period your payments will not go up or down following changes in our SVR, so you will have the certainty of knowing exactly how much you need to pay each month.

At the end of your special rate, your interest rate will change to our SVR, providing you haven't switched to another mortgage product.

I’m on a Discounted Mortgage.

If you are on a Discounted Mortgage, your interest rate is variable and is discounted against our SVR for a set period of time. This means if the SVR changes, so too will your monthly repayments and they could go up or down.

At the end of your special rate, your interest rate will change to our SVR, providing you haven't switched to another mortgage product.

I’m on a Tracker Mortgage.

If you are on a Tracker Mortgage, your interest rate is variable and it 'tracks', or is linked to, the Bank of England Bank Rate until the end of the special term. This means that any changes to the Bank of England Bank Rate will have an affect on your rate, and subsequently on your monthly payments which could go up or down depending on the change. However, changes to our SVR wouldn't mean a change in the rate of your tracker, as our SVR and Bank of England Bank Rate aren't linked directly.

At the end of your special term, your interest rate will change to our SVR, providing you haven't switched to another mortgage product.

I’m currently on SVR.

If you are on SVR, perhaps because your mortgage deal has come to an end and you have not switched your mortgage to one of our other Fixed, Discounted or Tracker Mortgage products, your interest rate will follow our SVR. This means that your monthly payments will go up or down in line with changes to our SVR.

If the SVR changes, what must I do?

If your monthly payment changes as a result of a change to our SVR, we will write to you with details of your new monthly payment.

Do I need to change my direct debit?

No, the new monthly payment will automatically be collected by us on the payment date shown in your letter. We will write to you with details of your new monthly payment as a result of any change to our SVR.

Do I need to change my standing order?

Yes, you will need to contact your bank to amend your standing order amount from the date the new monthly payment is due. We will write to you with details of your new monthly repayment as a result of any change to our SVR. Unfortunately, we cannot change your standing order on your behalf so you may find it easier to switch to paying by direct debit.

To switch to direct debit, complete and return the Mortgage Direct Debit Mandate or request a form by calling our Customer Contact Centre or pop into your local branch.

Do I need to change my cash or cheque payment?

Yes, you will need to change your payment to the new amount from the date the payment is due. We will write to you with details of your new monthly payment as a result of any change to our SVR.

You may find it easier paying by direct debit. Simply complete and return the Mortgage Direct Debit Mandate or call our Customer Contact Centre or pop into your local branch.

I'm on SVR and I am concerned about my payments increasing. What should I do?

For help and advice on your mortgage, please call our Customer Contact Centre or pop into your local branch to make an appointment with one of our Mortgage Advisers.

My monthly payments have gone up and I can't meet them. What should I do?

If your payments have increased and you feel you are unable to meet them, now or in the future, it is very important that you contact us as soon as possible. Please call our Customer Contact Centre or pop into your local branch and our friendly team will give you information on any options that might be available to you. Please read our web page on what you can do if you are having difficulty paying your mortgage.

Who can I contact to switch my mortgage?

For help and advice on switching your mortgage, please call our Customer Contact Centre or pop into your local branch to make an appointment with one of our Mortgage Advisers.

Bank of England Bank Rate (BoE Bank Rate)
Is the Bank rate the same as the Base Rate?

Yes, the Bank of England sets an interest rate ('Bank Rate', also know as 'Base Rate') at which it lends to financial institutions. This interest rate then affects the range of interest rates that are set by banks, building societies and other institutions for their own savers and borrowers.

What happens to my mortgage payments if the Bank of England Bank Rate goes up or down?

If you are on a Fixed Rate Mortgage, Discounted Mortgage or a mortgage where the interest rate is our Standard Variable Rate (SVR), you will not be impacted by a change in the Bank of England Bank Rate.

However, if you are on a Tracker Mortgage, your interest rate is variable and it 'tracks', or is linked to, the Bank of England Bank Rate until the end of the special rate. This means that any changes to the Bank of England Bank Rate will have an affect on your rate, and subsequently on your monthly payments which could go up or down depending on the change. At the end of your special term your mortgage interest rate will then change to our SVR, providing you haven't switched to another mortgage product.

If the Bank of England Bank Rate changes, what must I do?

If your monthly payment changes as a result of a change to the Bank of England Bank Rate, we will write to you with details of your new monthly repayment.

Do I need to change my direct debit?

No, the new monthly amount will automatically be collected by us on the payment date shown in your letter. We will write to you with details of your new monthly payment as a result of any change to the Bank of England Bank Rate.

Do I need to change my standing order?

Yes, you will need to contact your bank to amend your standing order amount from the date the new monthly payment is due. We will write to you with details of your new monthly payment as a result of any change to the Bank of England Bank Rate. Unfortunately, we cannot change your standing order on your behalf so you may find it easier to switch to paying by direct debit.

To switch to direct debit, complete and return the Mortgage Direct Debit Mandate or request a form by calling our Customer Contact Centre or pop into your local branch.

Do I need to change my cash or cheque payment?

Yes, you will need to change your payment to the new amount from the date the payment is due. We will write to you with details of your new monthly payment as a result of any change to the Bank of England Bank Rate.

You may find it easier paying by direct debit. Simply complete and return the Mortgage Direct Debit Mandate or request a form by calling our Customer Contact Centre or pop into your local branch.

My monthly payments have gone up and I can't meet them. What should I do?

If your payments have increased and you feel you are unable to meet them, now or in the future, it is very important that you contact us as soon as possible. Please call our Customer Contact Centre or pop into your local branch and our friendly team will give you information on any options that might be available to you. Please read our web page on what you can do if you are having difficulty paying your mortgage.

Who can I contact to switch my mortgage?

If you have any concerns or would like to discuss any changes to your mortgage, please call our Customer Contact Centre or pop into your local branch to make an appointment with one of our Mortgage Advisers.

If you have any concerns or would like to discuss any changes to your mortgage, please call our Customer Contact Centre or pop into your local branch to make an appointment with one of our Mortgage Advisers.