By the end of the year, all mortgage lenders and other financial services firms will stop offering products linked to LIBOR (the London Interbank Offered Rate).
This change is required by our regulator, the Financial Conduct Authority (FCA), and it means all LIBOR-linked mortgages must move to an alternative reference rate.
We want the fairest outcome for everyone so none of our customers are left worse off. We’re exploring alternative rates right now to decide what’s best.
As soon as we’ve made a decision, we’ll get in touch with every customer that has a LIBOR-linked mortgage. We’ll explain more about the new reference rate and how it’ll impact them. We’ll do this before we make any changes.
While we’re choosing our new reference rate, we’ve pulled together a handy list of FAQs to help you understand more about this change and what it means for you.
LIBOR stands for London Interbank Offered Rate. It is the rate at which major banks will lend to one another in the interbank market (over periods of overnight, one week, two weeks, one month, three months, six months and twelve months) and is currently used as a key interest rate benchmark across a wide range of financial products including mortgages.
LIBOR is no longer seen as a reliable, transparent, independent or representative interest reference rate.
The Financial Conduct Authority (FCA) has asked lenders (and other financial services providers) to stop using LIBOR as a reference rate by the end of 2021. We are required to select a replacement rate and advise our customers of this change.
We are considering which alternative reference rate will best suit the needs of our business and those of our customers. These changes must come into effect by the 31st of December 2021, we will post regular updates to keep you advised of the changes as the year progresses and notify all impacted customers in writing before making any changes.
If your rate is fixed you will not see any changes until the end of your fixed rate period. Your interest rate will then be calculated against the new reference rate rather than LIBOR.
If your interest rate is now variable (i.e. your fixed rate period has come to an end). The interest rate charged on your mortgage will increase and decrease in line with LIBOR. After the transition, changes to the interest rate charged will follow the alternative rate instead.
Your mortgage offer documents will show if your mortgage is linked to LIBOR. If your mortgage is impacted by the change, we will write to you to let you know.
Our aim is to make the transition seamless with minimal impact to you, however if you would rather repay your mortgage you may be required to pay an early repayment charge. Please check your mortgage documentation for details.
We will make sure that our customers are not any worse off and the alternative rate we select offers the fairest outcome for everyone, we are exploring a range of options.
No. You will not be charged any fees in relation to these changes.
We will write to tell you at least 28 days before we make any changes, unless we have to make the change more quickly because of a change in law or regulation.
All LIBOR mortgages will be impacted by the change. Any mortgages not LIBOR linked will not change.
The change will impact all LIBOR mortgages whether a payment deferral was taken or not. Any payment deferral arrangements will continue as agreed.
If you are struggling to meet your mortgage payments or worried about future payments, please don’t put off talking to us about this. The sooner we understand your circumstances, the quicker we will be able to discuss and explore the options that may be available and offer you support.
Please contact us on 0344 257 0427
(lines available Mon-Fri 09.00 – 17.30) or email
Please contact our Customer Services Team so we can provide you with appropriate support:
0344 257 0428
(lines available Mon-Fri 09.00 – 17.30)
There are a number of external sources of information which you may find useful:
If you have questions regarding any potential implications to your financial, legal, accountancy or tax matters as a result of the changes you should seek further guidance and independent advice from your professional advisors.