Variable Rate Terms

NineDeuce

When you buy a variable rate product on a mortgage - e.g. a 2 year discounted variable rate followed by the standard variable rate for the rest of the term - what can cause the rate to change within that initial 2 year period?

Is it just the B of E base rate or can the bank change it for any other reason?

Thank you.

TrickyDicky101

That would depend on what variable rate the mortgage product is linked to - for example, it could be the BoE Base Rate, but equally it could be Libor, the lender's own SVR, or something else entirely. If you are using a broker, she should be able to advise you which rate for which lender's products.

kingstreet

A discounted product is normally linked to a lender's standard variable rate.

A tracker product is normally linked to an external source, such as Bank Of England base rate. However, take care with these, as, for example, Barclays Bank base rate only mirrors BOE base rate while it suits Barclays.

amnblog

The Lender can cause the rate to change is the simple answer. They decide.

The only protection you have is that they need to keep close to the market so as not to lose business.