How we calculate your client's variable interest rate at the end of their product offer period
When your client’s owner occupied mortgage comes to the end of its product offer period and they haven’t chosen to switch their mortgage to one of our other deals, their mortgage will revert to a variable interest rate.
This variable interest rate will be the Society’s Standard Variable Rate (SVR) with a potential reduction applied dependent on your client’s Loan to Value (LTV). This means that as a result of any increase to the value of your client’s home or any reductions they make to their mortgage balance which reduces their LTV, they may benefit from a lower variable interest rate being charged.
However, if over time your client's LTV increases, any reduction received on their variable interest rate may be reduced and the variable rate may increase but will be no higher than the Society's SVR.
What are the different variable interest rates?
When the initial product rate ends the rate reverts to the Society’s Standard Variable Rate (SVR) currently 6.74% variable, or SVR with a potential reduction determined by your client’s Loan to Value at that time. The table below outlines the current variable interest rates that may be applicable.
Loan to Value % |
Variable interest rate payable |
|---|---|
Greater than 85% |
6.74% (Society’s SVR) |
Greater than 75% but less than or equal to 85% |
6.24% |
Less than or equal to 75% |
5.99% |
Guide to share with your clients
As a responsible lender we're always looking at ways we can provide customers with the information they need to enable them to make an informed decision.
We've developed a our 'What happens to your interest rate when your mortgage offer period ends' guide for you to share with your clients.
What you also need to know
How do we calculate your client’s Loan to Value (LTV)?
We regularly review the UK House Price Index (UK HPI) which measures changes in the value of residential properties. We will use the latest valuation information we have to assess what your client’s approximate LTV is when we undertake our annual review of your client’s variable interest rate. If your client has made any improvements to their home, these may not be reflected in the LTV we use. If this is the case or your client believes the valuation is inaccurate, we can revalue their property, however there will be a fee for carrying this out.
An annual review of your client’s mortgage account
The Society will undertake an annual review of the Loan to Value (LTV) in March every year. We will write to customers who are on the variable interest rate if their mortgage payment has changed as a result of their Loan to Value (LTV) changing since the last review. We also regularly review our variable mortgage interest rates considering a number of factors and current market conditions. Where a change to our variable mortgage interest rates takes place, we will always notify customers to let them know what their new monthly mortgage payment will be as a result of interest rates changing.
Other changes that can affect their variable interest rate
Some of the changes that would affect the Loan to Value (LTV) and when we would let your client know how this would affect their mortgage payment.
Changes that would affect your client's mortgage at the time a change occurs |
Changes that would affect your client's mortgage on an annual basis |
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