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What would a mortgage rate change mean for you?

The Bank of England 'base rate' is at a record low which is great news for many of us with mortgages. However, here’s everything you need to know in the event that this changes.

What is the Bank of England 'base rate'?

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.

  • Interest is either fixed, where you know the exact amount of interest you will pay over the interest rate period; or variable, which can change due to a number of factors such as the Bank of England Base Rate.
  • The Bank of England sets the Base Rate (the official bank rate) and reviews it regularly. If the Base Rate changes, lenders’ variable interest rates normally do too.
  • Higher interest rates mean bigger repayments on loans you’ve taken out, like your mortgage.

How to prepare for the 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, this link 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.
  • If you are on a lender’s Standard Variable Rate (SVR) you may want to think about moving your mortgage to protect against any unexpected rate changes.
  • 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 SVR does. A tracker rate mortgage moves up or down in line with the Bank of England Base Rate. This type of mortgage would work for you if you want to take advantage of any reductions in Base Rate and you don’t mind the potential change in monthly payments (whether that be up or down).
  • Can you make overpayments? If you can afford to, and the terms and conditions of your mortgage allow, you can increase your monthly payments or overpay with a lump sum. 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.
  • Take a look at our overpayment calculator to see how much interest you could save by paying a little more each month.
  • 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.

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

Find out how much you can borrow

Use our calculator to work out your budget, and we’ll tell you how much you’ll be able to borrow from us:

How much can you borrow?


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Remortgaging made simple

With a Virgin Money mortgage, you don’t need to move house to move your mortgage. If your current mortgage deal 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 perhaps you’re looking for flexibility or to pay off your mortgage early.

Whatever your reason for remortgaging, we are happy to talk you through all your options.

Five easy steps to remortgaging with Virgin Money

  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.

Interested in remortgaging with Virgin Money?

See if you can switch to a new deal with us or borrow more on your existing mortgage.

Find a new deal with Virgin Money Mortgages


Like to talk to us?

Speak to one of our dedicated mortgage experts now.

0800 028 5277

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