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How does mortgage interest work?
Generally, mortgage interest rates follow the Bank of England’s base rate.
For example, if you have a tracker mortgage at 1% above the base rate and the Bank of England’s base rate is 1%, your interest rate is 2%. If the base rate increases this will reflect in the interest to be paid.
Each bank may set their own base rate which closely aligns with the Bank of England base rate. At NatWest, the tracker rates follow the NatWest base rate.
Fixed rate and interest only mortgages will also incorporate Bank of England’s base rate, reflected in the mortgage rates available.
Fixed rate
A fixed rate mortgage interest offers a set rate of interest for a period of time (known as the 'term') e.g. 2 or 5 years. This means that monthly repayments will stay exactly the same for that period.
Learn more about fixed rate mortgages.
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Variable rate
A variable interest rate means that the interest rate is not fixed and may rise and fall inline with Bank of England’s base rate. There are different types of variable rate mortgages: tracker mortgage (NatWest currently don’t offer these mortgages), discount variable rate mortgage (NatWest currently don’t offer these mortgages) and standard variable rate (SVR).
Find out more and compare our mortgage types.
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What causes changes in mortgage interest rates?
The main reasons why mortgage interest rates may change are due to:
- Bank of England base rate changing.
- Lender competition, which could take into account things such as the housing market or economic climate.
What can I do next?
If your mortgage rate and repayments are going to change, there are a number of steps you may want to take.
Check our mortgage rates
If you're looking for a new mortgage or looking to remortgage, find out what we could lend you and view our mortgage rates by completing an Agreement in Principle (AIP)
Make mortgage overpayments
You could make overpayments in a lump sum or by increasing your monthly payments. By making overpayments, you'll be paying off the mortgage quicker and reducing the amount of interest paid. Use the calculator to see the impact this would have. Charges may apply.
Already have a mortgage with us?
Take a look at our mortgage switcher information to see if it would be suitable to move to a new deal.
More mortgage guides and information
Need some help?
Call us
We're on hand to arrange a phone or video call with one of our qualified mortgage professionals. We can also help with any general queries about the process.
Call us on ${dn-0800 096 9527}
Relay UK: 18001 0800 096 9527
Opening hours: Mon-Fri 8am-6pm, Sat 9am-4pm, Sun Closed. Excluding public holidays.
Buy to Let? We only provide Buy to Let mortgages online for small portfolio landlords.
- Please use our tools and guidance designed to help you complete your mortgage application online.
- We do not provide advice on Buy to Let mortgages but if you need technical help with your online application, get in touch so we can provide support.
- If you are not a small portfolio landlord, or you wish to apply with a mortgage professional, NatWest Buy to Let mortgages are available via mortgage brokers.