Table of Contents

 

What is the Bank of England base rate?

It’s the interest rate the Bank of England charges on the money it lends to financial institutions like HSBC. The Bank of England's Monetary Policy Committee generally meets once a month to decide if the rate should change.

 

What will happen to my savings rates?

We take a number of factors into consideration when reviewing our savings products, including market conditions and the Bank of England base rate. Following a change to the Bank of England base rate, we will review our entire savings range and notify customers promptly should we make any changes.

 

Why does it matter to me?

Any change in the base rate can influence the rates of existing or new products available through financial institutions. That’s because the cost of providing some of these products is directly linked to the base rate.

 

I have a Fixed Rate mortgage – what does it mean for me?

The fixed interest rate on your mortgage won't be affected by a change to the Bank of England base rate, and will stay the same until the end of the fixed rate period. After that, your mortgage will usually move to our Standard Variable Rate (unless you have made arrangements to move to another type of rate). We will always contact you around three months before the end of the fixed rate period so you can consider your options. You can find out when the fixed rate period on your mortgage ends by checking your mortgage offer and/or mortgage illustration.

 

I have a Standard Variable Rate, Buy to Let Variable Rate or Discounted Rate mortgage – what does it mean for me?

We review our Standard Variable Rate and Buy to Let Variable Rate when the Bank of England base rate changes. These rates are not directly linked to the base rate, so there is currently no change to them. If you have a Discounted Rate mortgage, the discount will be off our Standard Variable Rate. If there is a change to our Standard Variable Rate or Buy to Let Variable Rate, we'll automatically recalculate the standard monthly payment and send you a letter or secure e-message to your Personal Online Banking account with the new amount.

 

I have a Homebuyer CAT Standard, Homebuyer Variable Rate or Homebuyer Large Advance Variable Rate mortgage – what does it mean for me?

The 1% price promise will continue. The interest rate on your mortgage will be changed so it’s no more than 1% above the Bank of England base rate within 30 days of the base rate change. We'll automatically recalculate the standard monthly payment and send you a letter or secure e-message to your Personal Online Banking account with the new amount. 

 

I have a Tracker Rate mortgage – what does it mean for me?

The rate of interest charged on your mortgage will be changed within one day of any alteration in the Bank of England base rate. This will affect the amount of interest you pay. We'll automatically recalculate your standard monthly payment and send you a letter or secure e-message to your Personal Online Banking account with the new amount.

 

I have a Second Charge Equity Release Loan Variable, Standard Extra Large Advance or House Mortgage Rate – what does it mean for me?

The rate of interest charged on your mortgage will be changed within 30 days of any alteration in the Bank of England base rate. This will affect the amount of interest you pay. We'll automatically recalculate the standard monthly payment and send you a letter or secure e-message to your Personal Online Banking account with the new amount.

 

Is HSBC passing on the base rate change to their Standard Variable Rate?

Our Standard Variable Rate and Buy to Let Variable Rate are not directly linked to the base rate – but we do review them whenever there is a change in it. If we do make a change to our Standard Variable Rate or Buy to Let Variable Rate, we'll automatically recalculate the standard monthly payment and send you a letter or secure e-message to your Personal Online Banking account with the new amount.

 

When will any change come into effect and when will I be notified of any change to my mortgage payments?

We'll send you a letter or a secure e-message to your Personal Online Banking accounts at least 17 days before the standard monthly payment changes. This usually means your payment will change from the month following that in which the Bank of England base rate change announcement was made. For example, if the interest rate on your mortgage changes on 1 November and your monthly mortgage payment is due on 5 November, your standard monthly payment won't change until 5 December.

 

What difference will a rate change make to the amount of interest I have to pay?

This depends on the type of mortgage you have, and how much the rate has gone up or down. If you’re not sure what type of mortgage you have or how much interest you’re paying, please see your most recent mortgage statement or check it online via internet banking.

 

Do I need to do anything to be sure I’m making the correct mortgage payment?

Not if you pay your mortgage by Direct Debit, because your standard monthly mortgage payment will be amended automatically. If you’re paying by any other method, it’s your responsibility to amend your monthly payments to the new amount. We'll send a letter or a secure e-message to your Personal Online Banking account at least 17 days before your standard monthly payment changes. This usually means your payment will change from the month following that in which the Bank of England base rate change announcement was made. For example, if the interest rate on your mortgage changes on 1 November and your monthly mortgage payment is due on 5 November, your standard monthly payment won't change until 5 December.

 

I make regular mortgage overpayments through a Flexible Payment Arrangement with monthly Direct Debits. Do I need to change anything?

We won't change your Flexible Payment unless the new standard monthly payment required to repay the loan by the end of the mortgage term becomes higher than the amount you’ve asked us to collect each month.

For example, if you've arranged to pay £500 per month and your standard monthly payment rises from £450 to £475 per month, we'll continue to collect £500. However, if the standard monthly payment rises to £550, we'll automatically collect £550 to keep the repayment of your mortgage on track.

If you want to change or cancel a Flexible Payment Arrangement, just contact us online via 'My Messages' in Personal Online Banking. Or call Mortgage Servicing on 03457 662255. Opening hours: Monday - Friday 8am - 6pm and Saturday 8am - 5.30pm.

 

Why have my payments reduced following a Bank of England base rate increase?

It may be because you’ve been making regular overpayments, or you’ve made lump sum reductions to your loan without asking us to recalculate your standard monthly payments.

Whenever the interest rate is changed, the standard monthly payments are automatically recalculated to the minimum amount required to repay the loan balance at the revised interest rate over the remainder of the original term. As any previous overpayments will have reduced your loan balance, you don't need to pay as much in future to repay the loan by the end of the term.

If you wish to increase your monthly payment amount, you can set up an overpayment (called a Flexible Payment Arrangement) so that we collect a higher amount by direct debit every month. To arrange this, call Mortgage Servicing on 03457 662255. Opening hours: Monday – Friday 8am - 6pm and Saturday 8am - 5.30pm.

Please visit Making Overpayments for more information and how to apply. We need 10 working days' notice to set up your Flexible Payment Arrangement. If it's less than 10 working days until your next payment, we'll set it up from the following one.

 

What is the standard monthly payment and how is it calculated?

If you currently pay interest only, your standard monthly payment will be the amount you need to pay each month to cover the interest that has accrued on the capital balance of your loan. It’s based on how much interest will be paid over the term, divided by the number of monthly payments.

If you currently pay both capital and interest (known as capital repayment), your standard monthly payment is the amount you need to pay each month to cover both the interest that has accrued on the capital balance of your loan, and part of the capital. It’s calculated so as to ensure that, if you make all of the required payments in full and on time, your loan will be repaid by the end of the term as shown on your mortgage offer and/or mortgage illustration.

If you wish to arrange to increase your monthly payment amount, you can set up an overpayment (called a Flexible Payment Arrangement) so that we collect a higher amount by Direct Debit every month. To arrange this, call Mortgage Servicing on 03457 662255. Opening hours: Monday - Friday 8am - 6pm and Saturday 8am - 5.30pm.

Please visit Existing HSBC Customers for more information and how to apply. We need 10 working days' notice to set up your Flexible Payment Arrangement. If it's less than 10 working days until your next payment, we'll set it up from the following one.

 

How can I arrange to make overpayments every month?

By setting up an overpayment (called a Flexible Payment Arrangement) so that we collect a higher amount by Direct Debit every month.
Please visit Existing HSBC Customers for more information and how to apply. We need 10 working days' notice to set up your Flexible Payment Arrangement. If it's less than 10 working days until your next payment, we'll set it up from the following one.

 

Can I overpay if my loan has Early Repayment Charges?

Yes, subject to limitations. Please visit Personal Online Banking for details of your Annual Overpayment Allowance (AOA). As long as you don't go over your AOA for the year, you won't incur an Early Repayment Charge.

You can overpay by Flexible Payment Arrangement or by making ad hoc lump sum payments, and these will count towards your AOA. Once you exceed your AOA for the year, any additional overpayments within this period will incur an Early Repayment Charge.

 

Can I make overpayments and reduce the term of my mortgage?

Please contact us to check. This is for your protection, to assess whether you can afford to pay a higher amount for the remainder of the shorter mortgage term. Call us on 0800 169 633 Option 1 (online applications) or Option 4 (new applications) to find out more about what’s involved. Opening hours: Monday to Friday 8am - 9pm, Saturday 8am - 8pm, Sunday 9am - 6pm. 

 

Why is my final payment date showing as the date on my mortgage offer and/or mortgage illustration when I've been overpaying?

When we recalculate your standard monthly mortgage payment for a loan on a capital repayment basis, it must always be based on the term set out in your mortgage offer and/or mortgage illustration. That way, you always know the minimum standard payment you need to pay each month to ensure your loan is repaid by the agreed date.

If you currently pay interest only, your standard monthly payment will be the amount you need to pay each month to cover the interest that has accrued on the capital balance of your loan.

If you're making regular overpayments, you can always drop back to the standard monthly payment again if your circumstances change, or if you have other priorities for your money.

If you wish to continue paying a higher amount so that your loan is repaid sooner, you can do so by setting up a Flexible Payment Arrangement, or by increasing the amount of an existing one.

If you want to change a Flexible Payment Arrangement you should contact us online via 'My Messages' in Personal Online Banking or call Mortgage Servicing on 03457 662255. Opening hours: Monday - Friday 8am - 6pm and Saturday 8am - 5.30pm.

Please visit Existing HSBC Customers for more information.

 

Can I fix the rate on my mortgage?

Yes, usually. We offer a range of fixed interest rates that let you fix your rate and payments for a set period. Changes to the Bank of England base rate will not affect your payments during your fixed rate period.

There are 3 options to choose from, to move your mortgage to a different interest rate.

  1. If you would like to receive advice on the most suitable HSBC mortgage for you, or wish to change the loan term, please arrange an appointment with our mortgage specialists on 0800 169 6333 Option 1 (online applications) or Option 4 (new applications).
  2. If you’re happy to choose a rate and apply without receiving advice, you can apply to switch your mortgage online by logging in to Personal Online Banking and following the Rate Switcher instructions. This service enables you to apply, receive and accept the new mortgage offer online. Please note that you can't amend the loan term, repayment type or any other details with this service, nor will you benefit from the protections received when taking advice.
  3. Alternatively, you can receive face-to-face help and advice from one of our mortgage advisors at your local HSBC branch.

If you wish to apply to move to a different interest rate, regardless of whether you’re currently on a fixed rate, tracker or variable rate, you may do so by following any of the options above. 

 

I’m currently switching my mortgage product – can I change my mind?

Yes, during the switching process up until you accept your new mortgage offer. After that you are bound by the terms and conditions of your new product, which may include Early Repayment Charges if you wish to transfer to an alternative.

 

The Department for Work and Pensions (DWP) currently contributes towards my mortgage payments – will the amount they pay change?

The support you receive towards your mortgage is calculated by the DWP, and they'll advise you of any change. If they advise you that the amount of benefit towards your mortgage will change, you'll need to contact us to ensure your payments remain sufficient to cover the revised standard monthly payment.

If you have any queries about the amount the DWP are contributing to your mortgage, please contact them directly. Please note, it’s your responsibility to inform DWP of any changes to your standard monthly mortgage payments.

 

I have Amanah Home Finance – will the base rate changes impact me?

No, there is no immediate impact to Amanah Home Finance products. Mortgage rates are reviewed periodically and you’ll be contacted when your mortgage rate changes. 

 

Will any other products change (credit cards or loans, etc)?

We constantly review all of our products, and will always notify you of any changes that may impact you.

 

What about my savings or investments?

HSBC doesn't currently offer any savings accounts that are directly linked to the Bank of England base rate.

You won't see an immediate change to the rate of interest on your savings or investments. However, we do review the interest rates on our accounts and notify customers of any changes in line with the product terms and conditions.

 

What about my current account?

Only HSBC Student Accounts are affected, where credit interest is directly linked to the Bank of England base rate.

 

What about my overdraft?

No, none of our debit interest rates attached to our products are linked to the base rate. However, there are a small number of existing accounts where the overdraft interest rate is linked to the Bank of England base rate.