Will my monthly payment fall if the interest rate reduces?
In most cases, a lower interest rate will result in a lower monthly payment - although this is not always the case.
There are a number of important factors that can affect your new monthly payment when an interest rate change occurs. Unless you have recently asked us to recalculate your monthly payment, differences can arise for a number of reasons, for example where you have;
- incurred any additional fees and charges;
- taken a payment holiday;
- not paid ground rent/service charges and we have paid these on your behalf;
- made reduced monthly payments for any reason;
- missed any monthly payments for any reason.
The impact of these differences on your monthly payment may be exaggerated if you only have a short outstanding term remaining on your mortgage or loan.
If you are a customer who is affected by an interest rate change, we will write to you before any change to the interest rate or monthly payment that applies to your account. This letter will confirm both the date when the new interest rate will apply and the specific impact on your monthly payments. Until we send a letter to you, there is no need for you to take any action.