How we are making the transition away from LIBOR

We are making changes to some of our borrowers’ mortgages and terms and conditions, and we are advising them to contact their mortgage intermediary should they require advice.

The interest rate linked to some of our customers’ mortgage accounts is currently calculated with reference to the London Interbank Offered Rate for three-month sterling deposits determined on a particular day (LIBOR). LIBOR is due to cease immediately after 31 December 2021. As we are required by our regulator to move all our customers’ mortgage accounts where the interest rate is calculated with reference to LIBOR to an alternative reference rate, we currently anticipate moving their mortgage accounts to a rate of interest which will be calculated with reference to the Bank of England Base Rate (BBR).

Should regulatory guidance change prior to the cessation of LIBOR in such a way to make it inappropriate to use BBR as the alternative reference rate, another alternative reference rate may be used.

If a mortgage account currently refers to LIBOR as its reference rate, we will write to the borrower individually before 31st December 2021 to explain how the changes will affect their mortgage account and their mortgage terms and conditions. 

Since May 2020, all new Foundation Home Loans products, including Product Transfer products, have been based on, or revert to, an interest rate which refers to Bank Base Rate (BBR).


  • What is LIBOR?
  • Why do lenders have to move customers away from LIBOR rates?
  • What does this mean for the affected borrowers?
  • On what date will affected mortgage accounts be switched to the alternative reference rate?
  • Could a mortgage be switched to the alternative reference rate before the 1st April 2022?
  • What is LIBOR rate now?
  • What is Bank Base Rate now?
  • Will borrowers pay the same amount as they did previously?
  • To avoid transitioning, can borrowers repay their mortgage early without penalty?
  • What if a borrower does not want to change their mortgage terms and conditions?
  • Will the borrowers’ mortgage documentation need to change?
  • How do I know if a client’s mortgage currently references LIBOR?
  • Does this affect new mortgage applications?
  • If I have any further questions, who do I contact?
  • Where can I find more information?
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