If interest rates change will this affect my monthly buy-to-let mortgage rate?

POSTED: 14th September 2015
IN: Buy to let Existing Customers FAQs

The Bank of England Base Rate (BBR) is currently 0.5%, the lowest it has ever been. It has been this rate since 5thMarch 2009, the longest time the rate has been unchanged in recent times. It is unlikely that the rate will remain this low indefinitely.

To understand whether a BBR rise will affect your monthly payment you will need to check what type of mortgage product you have and which of our buy-to-let ranges it sits within as this will determine whether your rate is linked to Aldermore’s managed rate or LIBOR.

If your mortgage rate is linked to Aldermore’s managed rate an increase in the bank of England’s base rate could result in an increase to your monthly mortgage payment however as Aldermore’s managed rate is a standard variable rate set by us it could go up or down at any other point.

If your mortgage is linked to LIBOR, the London Interbank Offer Rate (the average rate a bank would be charged to borrow from another bank) then it could go up or down following its regular quarterly review.

The exception to this is if you are on a fixed rate mortgage where you will have agreed the rate of interest with Aldermore at the outset. Please be aware your monthly payment will still change once the agreed fixed period ends and you move to a variable rate, which will either be  based on Aldermore’s managed rate or linked to LIBOR.

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