Principality. Where home matters.
1 August 2016
Five Ways to Master Your Mortgage Rate
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Master Your Mortgage Rate
The Bank of England (BOE) interest rate can rise or fall. What does this mean for you and your mortgage?
What type of mortgage do you have?
Payments stay the same for a fixed period of time so are unaffected if interest rates rise within that period.
Variable or Tracker Rate
Payments may increase when the BOE rate rises or decrease when the rate falls. There may be a minimum interest rate which means if the BOE rate falls below a certain level, your monthly payments will not reduce further.
Standard Variable Rate (SVR)
This is the rate of interest set by your mortgage provider on a mortgage, without any discounts or deals. Changes can (but not always) be due to changes in the BOE rate.
These offer interest rates below a mortgage provider’s SVR for a specified length of time, so if the SVR changes, the discount mortgage rate may change.
If you’re unsure of your mortgage type or what the interest rate you’re paying is, check with your mortgage provider.
5 steps to master your mortgage rate
- Know your rate- understand your current rate.
- Follow the news- the BOE’s Monetary Policy Committee make monthly announcements on interest rates.
- Circle rate dates - mark your calendar with mortgage milestones like discount drop offs and end of fixed rate deals.
- Calculate the change- use an online calculator to work out how changes could affect you.
- Budget plan- be aware of how any payment changes impact on your household budget.