Does the Bank of England Base Rate affect my repayment

Not directly. We do not borrow any money to lend out like other bank and building societies. Our mortgage interest rates are set by an executive committee made up of senior management.

These rates are based on:

• Current market conditions
• Our appetite for lending
• Not directly tied to the Bank of England Base Rate

That said, the Bank of England Base Rate still influences the wider financial market, and as a result, it may have an indirect effect on the rates we offer in the future.

Fixed-Rate Mortgages

If you're on a fixed-rate mortgage, your interest rate and monthly repayments are guaranteed not to change during the fixed term. Base rate changes do not affect your repayments during this period.

Variable-Rate Mortgages

If you're on a variable-rate mortgage, your interest rate can change over time. While our rates are not directly linked to the Bank of England Base Rate, they may be influenced by changes in the economic environment, including base rate movements. In the event that our rates change, we will give mortgage members three months’ notice and will not apply early repayment charges should members chose to move lender.

How Is Interest Calculated?

We calculate mortgage interest similarly to unsecured loan interest:

Interest is accrued daily based on the capital balance (the remaining amount you owe).

Your monthly payment is made up of both capital repayment and interest. This means:

• Over time, as your balance reduces, less interest is charged.
• If interest rates change (for variable-rate products), your repayment amount may go up or down depending on the new rate.