In the world of mortgages, 'interest' is what lenders charge you to borrow money. The 'interest rate' determines how much that charge is and the total amount you'll end up paying back.

What is the Bank of England Base Rate?

The Base Rate is the official bank rate set by the Bank of England. It is reviewed regularly and when it changes, lenders' variable interest rates normally do too. Higher interest rates mean bigger repayments on loans you've taken out, like your mortgage.

On 2 August 2018 the Bank of England increased the Base Rate to 0.75%.

How to prepare for any Base Rate changes

  • Check your current interest rate. You can ask your existing lender for this, or check your mortgage statement. This will give you an idea of whether you are on a fixed rate or variable rate deal, and will tell you whether there are any charges to pay to change your existing deal. If you already have a Virgin Money Mortgage you can do this online and check your current interest rate opens in a new window 
  • Find your current loan to value (LTV). This refers to the amount you’re looking to borrow as a percentage of the value of the property. Typically, the lower your LTV, the cheaper the deal.
  • Consider the type of mortgage you need. With a fixed rate deal your monthly payments stay the same – no matter what the Base Rate or a lender’s Standard Variable Rate (SVR) does. A tracker rate mortgage moves up or down in line with the Bank of England Base Rate.
  • Take a look at our overpayment calculator to see how much interest you could save by paying a little more each month. This could help reduce the length of your mortgage or save you money on interest. Both our residential and buy-to-let mortgages give you the option to overpay.
  • Remember to take fees into consideration. If you change your mortgage, there may be fees to pay. It’s best to find out what these are and to try and work out how much they’ll cost you upfront.

Already got a Virgin Money mortgage?

Want to understand how your existing Virgin Money mortgage could be affected by a Base Rate change? The first thing to do is check what type of mortgage you're on.

Find out how your mortgage could be affected 

Five easy steps to remortgaging with Virgin Money

If your current mortgage deal with another lender is coming to an end it's a good time to start looking around. Moving to a new mortgage deal might enable you to reduce your monthly payments or give you the flexibility to be able to pay off your mortgage early.

  1. Find out how much you owe your current lender by asking them for a redemption statement.
  2. Talk to us to find a mortgage that fits the bill.
  3. We'll check your new monthly repayments are affordable.
  4. After running a credit check, we'll give you a Decision in Principle, which confirms how much we expect to be able to lend you.
  5. We will then complete the necessary checks and a valuation of your property, before preparing the final documents to complete your new mortgage.

Your home may be repossessed if you do not keep up repayments on your mortgage.


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