Your most frequently asked questions

Warning: THE MORTGAGED PROPERTY (WHICH MAY BE YOUR HOME) MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Your most frequently asked questions

1. How is my mortgage affected when interest rates change?

If your mortgage operates on the annual review scheme, your monthly payment will not normally be amended when interest rates change. Your monthly payments will usually only change once a year at the annual review date and your new payment will usually take effect from March, no matter how many times interest rates change during the year. At each annual review your monthly payment will only be amended if the change as a result of the review is £3 per month or more, or where the change is less than £3 but represents more than a 20% change in your monthly payment. Any smaller change will not take effect, but will be taken into consideration at future annual reviews. If this happens, your mortgage balance, on which interest is charged, may increase. If you would like your monthly payment to be recalculated please contact us*.

Any changes in interest rates will be advertised in our branches and in two national newspapers. If interest rates increase, any underpayment of interest will be reflected in your revised monthly payments and will be repaid over the remaining mortgage term. If interest rates reduce, any overpayment of interest will be deducted from your mortgage balance, and your next monthly payment will be calculated on the lower balance outstanding.

If your mortgage does not operate on the annual review scheme your monthly payment will be amended whenever there is a change to your mortgage interest rate. We’ll write to you with further details when this happens.

2. Why has my new monthly payment changed?

There are a number of reasons why your monthly payment may have changed. The main reasons could include:

  • If your mortgage operates on a variable rate which is linked to the Bank of England Base Rate, your monthly payment will be calculated to reflect any change in the rate of interest.
  • If any fees were debited to your mortgage in 2019, this could also lead to an increase in your mortgage balance, resulting in your new monthly payment increasing as well.
  • If you have mortgage payment protection insurance arranged as part of your mortgage, your monthly payment may also change when your insurance is renewed or reviewed.
  • If you have missed or underpaid any monthly payments in 2019, this could lead to an increase in your mortgage balance, resulting in your new monthly payment also increasing.

If your mortgage currently operates on a fixed, discounted or tracker product that is due to end before the next review date, your monthly payment will be amended at that time and we will write to you before your payment changes.

3. Why has my mortgage balance increased?

There are various reasons why your mortgage balance may have increased:

  • If you have missed or reduced your mortgage payments. Please compare the list of monthly payments that were due on your mortgage during 2019, with your annual mortgage statement, which shows the payments you have actually made.
  • If you have opted to add further fees to your mortgage account rather than pay them separately, this will increase the outstanding mortgage balance.
  • Occasionally, the payment due on your account in December may not reach us until the first few days of January. This payment will not be shown on your annual statement, but will be included in the statement issued next year instead. Usually, such payments are shown as ‘Previous Year Payments’ and are treated as if they had been received in December for the calculation of interest.
  • If your mortgage operates on the annual review scheme any increase in your monthly payment for less than £3 will be taken into account at future reviews, (unless the change represents more than a 20% change in your monthly payment, see question 1 for further details). Your mortgage balance, on which interest is charged, may increase slightly as a result of this.

4. How can I reduce my mortgage balance more quickly?

Some mortgages allow you to make overpayments which will reduce your mortgage balance. The two most common ways of doing this are:

  • To pay a higher amount than the new monthly payment quoted; or
  • To make a lump sum payment at any time.

If your mortgage product is daily interest, any of the above options will reduce your balance on which interest is charged with immediate effect. If your mortgage product is annual interest, to reduce your balance on which interest is charged with immediate effect, any overpayments must be for £1,000 or more.

Please note that, subject to the terms and conditions of your mortgage, any overpayment, including regular higher payments and lump sum capital payments, may incur an early repayment charge.

5. Can I change the date that my Direct Debit payments are collected?

Yes you can choose to make payments between the 1st and 28th of each month. Please contact us* to arrange to amend the date.

6. What can I do if I anticipate having problems in meeting my mortgage payments?

If you experience any difficulty in meeting your regular mortgage payments, it is important you contact us as early as possible and we will always try to assist. There may be a number of ways we can help, depending on your individual circumstances. Please contact us.*

7. I have an interest only mortgage and I am concerned about repaying my outstanding loan, what options are available to me?

If you don’t have a repayment strategy in place to repay the mortgage balance at the end of the mortgage term you should contact us as soon as possible to discuss the options available to you, before your mortgage comes to an end.

Please see the Your Mortgage webpages for further information.

We are here to help, so please contact us* and we will be happy to assist.

8. I am concerned about repaying my mortgage balance where the mortgage term is due to end shortly, what options are available to me?

Please contact us* and we will be happy to assist.

If you would like additional information from an independent source, there are various options available to you:

  • Money Advice Service 0800 138 7777, www.moneyadviceservice.org.uk. This is a free service that provides clear, unbiased advice to help you make informed choices.
  • Citizens Advice www.citizensadvice.org.uk. They provide free, independent, confidential and impartial advice.
  • Independent Financial Advice

Other websites you may find useful are: mylocaladviser.co.uk, unbiased.co.uk and findanadviser.org

Please see the Your Mortgage webpages for further information.

Any further Questions?

Find out how to contact us by visiting our contact details page.