If the rate of interest you pay on your mortgage, or will pay at the end of any fixed rate period, is linked to LIBOR, you may be aware of the regulatory announcement that LIBOR will cease to be published as a standard interest rate benchmark from the end of 2021.

LIBOR stands for London Interbank Offered Rate and is a rate set independently of us by ICE Benchmark Administration Limited. You can find out more information about LIBOR at www.theice.com/iba/libor.

As LIBOR ends we will need to transfer your mortgage to a different interest rate benchmark which is ‘comparable’ to LIBOR. As yet we cannot say what alternative rate we will use to calculate the rate of interest you pay or will pay at the end of any fixed rate period. There are several options being considered by all the Banks and industry bodies, as a comparable rate to LIBOR.

You do not need to take any action at this stage. We will write to you as soon as we can with details of how this will affect your mortgage with us and give you plenty of time to consider your options before any changes take effect.

Customer FAQs

These Frequently Asked Questions have been prepared to support our Customers during the transition away from LIBOR as a benchmark rate. We will update these on a regular basis throughout the transition period. Please note that the contents may not be relevant or specific to your individual circumstances.

The information below seeks to provide general guidance, further information is available from the Financial Conduct Authority and UK Finance websites.

1. What is LIBOR?

LIBOR stands for London Interbank Offered Rate and is a rate set, independently of us, by ICE Benchmark Administration Limited. You can find out more information about LIBOR at www.theice.com/iba/libor.

2. Why is LIBOR being phased out?

The LIBOR benchmark relies on estimates from banks of their borrowing costs in markets which are no longer active, so international regulators no longer consider LIBOR sufficiently robust or sustainable given its widespread use.

In July 2017 the Financial Conduct Authority (FCA), confirmed that the FCA does not intend to sustain LIBOR through its influence or legal powers beyond 2021 and made clear that financial institutions must transition impacted customers to alternative rates before that date. All mortgage lenders have been proceeding on this basis and it has since been confirmed in March 2021 that LIBOR will no longer be available after end of 2021.

Subsequently, lenders globally have been working to move customers onto safer and more transparent benchmark rates.

3. What is the potential impact on me?

Where the interest rate you pay is or will be calculated by reference to LIBOR  after 31st December 2021 an alternative interest rate benchmark rate will need to be used to calculate the interest rate you pay. We will write to affected customers as soon as we can with details of how this will affect their loan with us to give them time to consider their options before any changes take effect.

4. When will my mortgage(s) transition to an alternative interest rate?

The FCA has recently confirmed that Sterling LIBOR will discontinue at the end of December 2021.

We will write to affected customers as soon as we can with details of how this will affect their loan with us to give them time to consider their options before any changes take effect.

5. When will I know what rate LIBOR will change to?

We will be in touch with you in advance of December 2021 to tell you more about the alternative benchmark rate that your mortgage interest rate will reference and the options that are available to you.

6. Am I going to pay the same amount?

The FCA has made it clear that LIBOR transition should not be used to move customers with LIBOR linked mortgages to replacement rates that are expected to be higher than what LIBOR would have been, or otherwise introduce inferior terms.

7. What are the next steps?

We will write to affected customers as soon as we can with details of how this will affect their loan with us to give them time to consider their options before any changes take effect.

8. Who should I contact if I would like to discuss this further?

There is no need to take any action at this stage. We will write to affected customers as soon as we can with details of how this will affect their loan with us to give them time to consider their options before any changes take effect, however; if you have any additional questions please contact us.

9. Where can I find useful links for further information?

If you are looking for more detailed information about LIBOR; the following link from industry bodies and organisations may be useful:

Financial Conduct Authority
UK Finance

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This information is for mortgage professionals only and not intended for use by the general public. All rates, programmes and pricing are subject to change at any time and without prior notice. Mortgages are subject to valuation and approval.