Questions you may have about your mortgage

Find answers to the most common questions about your mortgage.

General

What’s the difference between variable and fixed rates? expandable section

What’s the difference between variable and fixed rates?
Variable interest rate	Fixed interest rate
Variable interest rate Your interest rate can change in line with your terms and conditions. This means your monthly payments can go up or down when your rate changes.	Fixed interest rate Your interest rate is the same for an agreed period. At the end of that period, we switch you to another rate, usually one of our variable rates.
Variable interest rate If you have a tight budget and will struggle to make higher monthly payments, this type of rate may not be suitable for you. If you can afford the monthly payments, you could benefit by staying on a variable rate. It will cost you more each month if interest rates rise but you could benefit if they fall.	Fixed interest rate Your interest rate will stay the same during the fixed rate period, even if the Bank of England Bank Rate or our lender variable rates change. A fixed rate gives you the security of knowing your interest rate won’t change during the fixed rate period.
Variable interest rate Early Repayment Charges don’t usually apply, giving you more flexibility to make overpayments or fully repay.	Fixed interest rate Early Repayment Charges usually apply.

What's the difference between a tracker rate and a lender variable rate? expandable section

A tracker rate is a variable interest rate that is more, less or the same as another rate that is set by someone else. An example is the Bank of England Bank Rate.

A lender variable rate is an interest rate that we set and can decide to change. It does not track another rate such as the Bank of England Bank Rate.

When can we change a tracker rate? expandable section

When can we change a tracker rate?
Your Interest Rate	Current Bank Rate	Change in Bank Rate	New Bank Rate	Your new Interest Rate
Your Interest Rate 1.1%	Current Bank Rate 0.1%	Change in Bank Rate +0.25%	New Bank Rate 0.35%	Your new Interest Rate 1.35%
Your Interest Rate 1.1%	Current Bank Rate 0.1%	Change in Bank Rate -0.1%	New Bank Rate 0%	Your new Interest Rate 1.0%
Your Interest Rate 1.1%	Current Bank Rate 0.1%	Change in Bank Rate -0.25%	New Bank Rate -0.15%	Your new Interest Rate 0.85%
Your Interest Rate 1.1%	Current Bank Rate 0.1%	Change in Bank Rate -1.25%	New Bank Rate -1.15%	Your new Interest Rate 0%*

*Even if the Bank Rate is less than 0%, your interest rate will stay at 0%.

When can we change a lender variable rate? expandable section

We can reduce the rate for any reason, but we’ll only ever increase a lender variable rate in the following situations:

Change to our cost of lending

For example, we usually review the lender variable rate if the Bank Rate changes. This is because it can affect how much it costs us to fund your mortgage. Your interest rate may not change in line with the Bank Rate, but it is a relevant factor when we set our lender variable rates. Because funding mortgages is complex, we may also need to consider other costs.

Changes to laws and regulations

These might change, or we might know they are about to. If the change means we should change a lender variable rate, we’ll do so. This includes making a change because our costs have gone up due to those changes to laws and regulations.

We’ll always let you know of any planned changes. Your mortgage conditions booklet that you received when we approved your mortgage explains when and how we do this. We can give you a new copy of this booklet if you need one, contact us using the details in your letter.
The Bank of England Bank Rate has changed, why has my lender variable rate not changed in the same way? expandable section

A lender variable rate does not track the Bank Rate because it is a rate that we set. We consider the Bank Rate when we review a lender variable rate. We can decide to change it at a different time, by a different amount or not at all.
My mortgage is on interest-only and the rate has changed do I have to do anything? expandable section

If all or part of your mortgage is on interest-only, your monthly payments only pay the interest and don’t reduce what you owe. It’s important you have plans in place to repay the capital amount at the end of the term. Learn more about how interest‑only mortgages work and your options.

If you don’t have plans in place or have any concerns, talk to us about other options.

My rates have changed

How do we work out your monthly payments? expandable section

When we work out your monthly payments, we look at each account separately. We only change the monthly payment on the accounts affected by the change. This may mean that only some accounts, not all, have their monthly payment worked out again.

When we work out your monthly payment, we won’t include any future contractual monthly payments we expect to receive. We use the amount you owe, less any arrears, on the day before we work out the new payment.

This means if your current monthly payment hasn’t been received, your new payment may be higher or lower than it needs to be to repay what you need to by the end of the term. We will work out your monthly payment again after your current monthly payment has been received if you ask us to.

This could happen again in the future if we have not received your current monthly payment before we work out a new one. Changing your monthly payment date to earlier in the month would reduce the likelihood of this happening.
Why has my payment amount changed by more or less than I  expected? expandable section
Your payment amount may change because of other changes to your account balance. For example:

you’ve made overpayments to your account
we’ve added charges or standard costs to your account. We would have written to you about these charges when they were applied to your account.
Do overpayments reduce my mortgage term? expandable section

Your repayments do not change unless you request us to work them out again or we carry out our annual review. Your repayments will be worked out again when your rate expires. The term will not change unless you request a term reduction.
I make monthly overpayments, do I need to do anything? expandable section

No, you don’t need to do anything unless you want us to work out your monthly repayments again. If you want us to work out your monthly payments again, contact us by emailing mortgageadministration@lloydsbankinternational.com.
I’ve swapped to interest-only payments for 6 months expandable section

Your monthly interest-only payment will change to reflect the new rate you choose. This means your payment amount may increase or decrease depending on the rate selected. The term of your interest-only arrangement will remain the same. This change does not affect the duration of your interest-only period.
I have arrears or a small underpayment on my account, are these included in my new monthly payment? expandable section

We’ve excluded the arrears from the balance we use to work out your new monthly payment. This means the monthly payment on its own won’t be enough to repay everything you owe by the end of the mortgage term. So, if you don’t already have one, you’ll need to make a separate arrangement with us to repay these arrears.

Contact us if you have made a special payment arrangement, or if you are making regular overpayments. Call us on +44 1624 657 526 or come into the branch.
What should I do if I’m having difficulty making my payments? expandable section

If you’re struggling to make your payments, let us know as soon as possible. We can talk through your situation to understand how we can help.

You can email us on mortgageadministration@lloydsbankinternational.com or come into the branch.
Where else can I go for debt advice? expandable section
You can ask for free, independent help about managing repayments and getting on top of your finances from many debt advice organisations. These include:

Isle of Man - Office of Fair Trading .
gov.im/categories/tax-vat-and-your-money/manage-your-money/debt-counselling/
Jersey – Citizens Advice.
www.citizensadvice.je/category/money-debt/ or  gov.je/taxesmoney/debt/Pages/index.aspx
Guernsey - Citizens Advice.
citizensadvice.org.gg/a-z-information/Debt

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