Lender Base Rate (LBR)

Mortgages offered from 24 March 2021.

Lender Base Rate (LBR) is currently:

0.05%

All information correct on the date and time of: October 17, 2021 8:00 pm
You should read this together with the Second Charge Mortgage Offer sent to you prior to completion and our current General Mortgage Conditions which are available here. Other than during a Fixed Rate Period the Interest Rate will be a variable rate that is, or is linked to, Lender Base Rate (“LBR”) specified in the Offer and that we control. We may vary the Interest Rate by varying the LBR in accordance with the Offer and Condition 4 of the General Mortgage Conditions. We may reduce the LBR for any reason without giving you notice first. If we do not give you notice before the reduction we will do so as soon as possible afterwards, telling you when the change takes effect. As well as our rights under Condition 4.2 and the provisions of Condition 16.3 of the General Mortgage Conditions, we may increase the LBR to reflect any one or more of the following:
  • Changes to the cost of raising the finance to allow us to make loans. These costs will typically be linked to changes in the rate (or rates) used for lending by banks and other financial institutions to each other;
  • Changes in the Bank Rate of the Bank of England (or any successor to it);
  • Changes in our administrative or other costs in providing loans or running our lending business that are beyond our reasonable control; or
  • Changes in legal or regulatory requirements or guidance, or new decisions of the courts or Ombudsmen.
Any increase in the LBR will be proportionate to the reason(s) for the increase. On each occasion that the Interest Rate changes we will give you at least 7 days’ notice of the change. If we wish to change the Monthly Payment, we must first give you at least 14 days’ notice of the changed amount. The notice will say when you must start paying the changed amount. Please contact us if you require further details.

Optimum Base Rate (OBR)

Mortgages offered between 15 February 2016 and 24 March 2021

Optimum Base Rate (OBR) is currently:

0.00%

All information correct on the date and time of: September 27, 2021 10:44 am

If your mortgage offer was dated between 15 February 2016 and 24 March 2021, details about your interest rate can be found below and by reading the relevant sections of the General Mortgage Conditions booklet

Your interest rate will change in accordance with the terms of your mortgage offer and applicable general mortgage conditions.

Please contact us if you require further information

We would like you to be aware of an upcoming industry-wide change to LIBOR, which is relevant to Optimum Credit mortgages.

LIBOR means the London Interbank Offered Rate. This is the rate of interest at which banks offer to lend money to one another on a short-term basis in the wholesale money markets in London. Each day a select panel of banks is required to submit the rate at which each could borrow funds from another. These submissions are compiled and used to calculate LIBOR.

When LIBOR changes, this may affect the rate at which a lender can borrow money, sometimes referred to as their ‘cost of funding’. LIBOR is therefore used by many lenders (including Optimum Credit for some of our mortgages) as a reference for setting variable interest rates on mortgage loans and other financial products.

We currently use LIBOR as a reference rate for setting the interest rates for our mortgage products once any fixed interest rate period has ended. This means that the interest rates on our mortgage products vary in accordance with changes in LIBOR, on the terms set out in your mortgage offer and general mortgage conditions.

With effect from 1 January 2022, LIBOR will no longer be a valid reference rate for us to use when setting interest rates. For more information on the discontinuation of LIBOR, see https://www.fca.org.uk/consumers/mortgage-interest-rates-libor

From 1 January 2022, we will replace LIBOR as a factor in determining our costs of funding with Sterling Overnight Index Average (“SONIA”) compounded over a period. SONIA is a reference rate administered by the Bank of England and reflects the average of the interest rates that banks pay to borrow Sterling overnight from other financial institutions or investors. You can find more information on SONIA at https://www.bankofengland.co.uk/markets/sonia-benchmark.

Consequently, just as to date, changes in LIBOR could have resulted in changes to the OBR, from 1 January 2022 changes in SONIA may cause the OBR to increase or decrease, in which case your interest rate would increase or decrease accordingly.

In calculating SONIA and its effect on the OBR we will apply what is known as a “credit adjustment spread”. This market-adopted mechanism reduces the economic differences between LIBOR and SONIA, which result from, amongst other factors, the term credit risk premium that is built into LIBOR, but not into SONIA.

You will continue to be provided with advance notice of any change to your monthly payment as a result of a change to the OBR, in accordance with the General Mortgage Conditions applicable to your mortgage.

If you have any questions, please contact our customer service team on 0333 014 3125.

There are no other changes being made at this time.  

Mortgages Offered before 15 February 2016

If your Mortgage Offer was dated before 15 February 2016, please refer to your Loan Agreement or contact us for details.

Your interest rate will change in accordance with the terms of your Loan Agreement.

Please contact us if you require further information

We would like you to be aware of an upcoming industry-wide change to LIBOR, which is relevant to Optimum Credit mortgages.

LIBOR means the London Interbank Offered Rate. This is the rate of interest at which banks offer to lend money to one another on a short-term basis in the wholesale money markets in London. Each day a select panel of banks is required to submit the rate at which each could borrow funds from another. These submissions are compiled and used to calculate LIBOR.

When LIBOR changes, this may affect the rate at which a lender can borrow money, sometimes referred to as their ‘cost of funding’. LIBOR is therefore used by many lenders (including Optimum Credit for some of our mortgages) as a reference for setting variable interest rates on mortgage loans and other financial products.

We currently use LIBOR as a reference rate for setting the interest rates for our mortgage products once any fixed interest rate period has ended. This means that the interest rates on our mortgage products vary in accordance with changes in LIBOR, on the terms set out in your Loan Agreement.

With effect from 1 January 2022, LIBOR will no longer be a valid reference rate for us to use when setting interest rates. For more information on the discontinuation of LIBOR, see https://www.fca.org.uk/consumers/mortgage-interest-rates-libor

From 1 January 2022, we will replace LIBOR as a factor in determining our costs of funding with Sterling Overnight Index Average (“SONIA”) compounded over a period. SONIA is a reference rate administered by the Bank of England and reflects the average of the interest rates that banks pay to borrow Sterling overnight from other financial institutions or investors. You can find more information on SONIA at https://www.bankofengland.co.uk/markets/sonia-benchmark.

Consequently, just as to date, changes in LIBOR could have resulted in changes to your interest rate, from 1 January 2022 changes in SONIA may cause your interest rate to increase or decrease accordingly.

In calculating SONIA and its effect on your interest rate we will apply what is known as a “credit adjustment spread”. This market-adopted mechanism reduces the economic differences between LIBOR and SONIA, which result from, amongst other factors, the term credit risk premium that is built into LIBOR, but not into SONIA.

You will continue to be provided with advance notice of any change to your monthly payment as a result of a change to your interest rate, in accordance with the terms of your Loan Agreement applicable to your mortgage. If you have any questions, please contact our customer service team on 0333 014 3125.

There are no other changes being made at this time.