Sonia Rates Vs Libor Rate

Fairyeggs

I been asked for consent to switch.
Interest free mortgage 130k 14 Years left,
I’m struggling to understand how this work and will I be better off, I phoned my bank still don't get it. 
At the moment they said Sonia rate is lower than libor. 
Quick google say it can go higher. 

So, I am not sure what to do,

Ex not really bothered and we can’t remortage due to ex in IVA. Personally, I do not want to go back on repayment now as ex be making money. I also can afford this interest mortgage easily.

 

Thinking if I should ring a fincial advisor to explain and weather i worth it, thought i asked here first incase it just a simple answer

Sandtree

You mean interest only mortgage rather than interest free I guess?

SONIA will typically be lower than LIBOR was as it doesn't include the credit risk premium however they are notably different beasts with LIBOR being a forward prediction whereas SONIA is a backward looking calculation based on actual transactions. 

Edi81

Typically libor is between 5-8 basis points lower than BOE base. 

Now, base is 1.25 and SONIA is 1.19 and does track base as each rate increase has led to higher SONIA.