The current Bank of England base rate has risen 0.25% this month to 0.75%. Here, we look at how this change will affect you as a member.
Following the announcement by the Bank of England we can announce that will be increasing our savings rates for our members as well as increasing our Standard Variable Rate (SVR).
We will be increasing the rates on our variable savings accounts from September 1, including passing on the full 0.25% across all of our ISAs and teacher/education accounts.
If you have a savings account with a fixed term interest rate then this will not change for the duration of the term.
How will Teachers Building Society let me know about my savings rate?
Teachers Building Society will notify all affected members.
We will be increasing our Standard Variable Rate (SVR) from 4.99% to 5.24% from October 1. This will be communicated in advance in writing to all members who have a mortgage with us, explaining how this will affect their mortgage payments.
What is a Standard Variable Rate?
A Standard Variable Rate (SVR) is a lender’s ‘default’ rate – without any limited deals or discounts attached. A lender can raise or reduce its SVR at any time. SVR tends to be influenced by changes in the UK base rate although a lender is not required to change it.
How does an increase in SVR affect my mortgage?
If you have a fixed mortgage then your rate will not change for the duration of your fixed deal. However, the rate your mortgage reverts onto at the end of the fixed rate deal will be linked to your lenders SVR.
If you have a variable rate mortgage that is linked to your lender’s SVR, then it is likely that the interest rate on your mortgage may increase along with the base rate increase.
If you would like to speak to someone at Teachers Building Society about your mortgage call 0800 378 669 or speak to a member of our savings team on 0800 783 2367.
For more information on the terminology used with regards to your mortgage or savings visit our jargon buster pages. You can find the savings jargon buster here and our mortgage jargon buster here.
General Information on Interest Rates
What is an interest rate?
An interest rate is the percentage amount that will be charged (mortgages) or paid (savings) on an amount of money you have borrowed or saved.
For example if you borrow money from a bank or building society you will have to repay the borrowed amount, plus interest based on the interest rate set by the bank or building society.
If you put savings into a bank or building society account you will earn interest on this money at the interest rate set by the bank or building society.
All interest rates will be influenced by the Bank of England base rate.
What is the UK base rate?
The current UK base rate as of August 2018 is 0.75%. The rate can be checked at any time on the Bank of England’s website: www.bankofengland.co.uk (Displayed on home page as Current Bank Rate).
Who sets the UK base rate?
The UK base rate is set each periodically by the Bank of England’s Monetary Policy Committee (MPC). Banks and building societies then set their own interest rates – on mortgage lending and savings - based on this rate. The MPC meets 8 times a year to look at possible rate changes.