How interest works.

Interest is the money we charge you in return for borrowing from us.
Variable and fixed rates

Fixed-rate mortgage

With a fixed-rate mortgage, your interest rate is guaranteed to stay the same for a set time.


Variable-rate mortgage

With a variable-rate mortgage, the interest rate applied to your account can change. The rate can increase or decrease in line with the terms and conditions of your mortgage.

One of the reasons we may vary your interest rate is as a result of a change in our costs of fund, which is the money that we obtain to lend to you. We will write to you at least 28 days before we make any changes to your interest rate. We will include information about what your interest rate is, what it will change to, and the resulting increase or reduction in your monthly payments.


Fixed-rate mortgage changing to a variable rate

At the end of the set fixed-rate period, the interest rate will link to one of our variable interest rates.


Bank of England Base Rate − The Bank of England Base Rate is set by the Bank of England. When this rate increases or decreases, we will increase or decrease the interest we charge on our Bank of England-linked mortgages by the same amount. We will write to you within 14 days of the interest rate being changed.


Together Homeowner Managed Rate (THMR) plus product margin − THMR is a variable interest rate set by us. It may increase or decrease in certain circumstances as set out in your terms and conditions. One of the reasons is a change in our costs of fund, which is the money we obtain to lend to you. Included in your interest rate is a fixed percentage rate (as set out in your mortgage offer) called a product margin. This does not change during the life of your mortgage and is added to the THMR rate to reach the total interest rate that will apply to your mortgage. We will write to you at least 28 days before we make any changes to your interest rate. We will include information about what your interest rate is, what it will change to, and the resulting increase or decrease in your monthly payments.

Your mortgage offer will set out all the circumstances in which your interest rate may be varied and the current interest rate your mortgage will change to at the end of the fixed- rate period. The variable interest rate you change to may be higher or lower because our rates vary over time as set out above. We will get in touch with you 120 and 45 days before the end of your fixed-rate period to confirm your interest rate and outline your options.