Customers

What you repay

This page provides general information. For more specific and tailored information please contact us.

When you take out a mortgage, you will need to repay it and like all lenders, we require our customers to make regular monthly payments. However, we know that there may be times when you experience difficulties doing this, or expect that you are about to. If that is the case, please see our ‘Help with repayments’ page.

New Street Mortgages - Lender Base Rate Setting Policy

Your mortgage interest rate affects the amount you have to pay each month. If you have a fixed rate mortgage, your interest rate will not change for the duration of the fixed term. If you have a variable interest rate mortgage, or your fixed term has come to an end, your interest rate will be the New Street Lender Base Rate and this rate may change from time to time.

You will receive a letter notifying you of any change in the interest rate applicable to your loan and the amount of your new monthly payment.

You can find out what type of interest rate applies to your mortgage, and how long any fixed term will last, in your mortgage offer letter.

The New Street Lender Base Rate is 5.19% effective from 1^st September 2024. Please note that this rate is indicative, so check your correspondence from us or contact us for your specific rate.

We apply changes in the interest rate from the date the change becomes effective, the effective date of the most recent change is shown above. If a change affects you, it will be reflected in your next contractual monthly instalment after the change.

LIBOR Transition: Your Questions Answered

LIBOR (the London Interbank Offered Rate) was discontinued at the end of 2021 which made it necessary to transition customers who had a LIBOR linked mortgage to a new reference rate. You would have received letters from us if this change impacted your mortgage.

My mortgage rate is called New Street LBR. How am I affected?

These interest rates were calculated using LIBOR. KSLR has replaced LIBOR in the calculation of your rate. The name of your rate has not changed.

How do I know if I was impacted?

You were impacted if your mortgage in November 2021 had a variable rate or would change to a variable rate after its initial fixed-rate period ended, that was calculated using LIBOR. All impacted customers would have received a letter before November 2021 to explain how we planned to manage the transition to a new rate.

Why did you change my mortgage rate?

LIBOR stopped being available for use after December 2021 so we needed to replace it in the calculation of your interest rate with a new rate that was as close as possible to LIBOR.

Which rate did you replace LIBOR with?

We replaced LIBOR in the calculation of your interest rate with a rate that is the same as the fall-back rate the Financial Conduct Authority (FCA) created to replace LIBOR. We used this approach so that you were not disadvantaged by the change. The rate that replaced LIBOR is called KLSR which stands for Kensington Synthetic Libor Rate.

What is KSLR and how is it calculated?

KSLR is named after Synthetic LIBOR, the fall-back rate created by the FCA as a replacement for LIBOR. KSLR is calculated in the same way as Synthetic LIBOR. It is calculated using independently published data on interest rates being paid in the market. As a result, KSLR will change as interest rates in the market change and Kensington will not be able to influence the value of KSLR.Synthetic LIBOR and KSLR are calculated using Term Sonia Reference Rate (TSRR), a publicly available rate, plus an adjustment of +0.1193%. The fixed additional amount of 0.1193% was determined as appropriate by FCA and is the average amount, over a 5 year period, by which LIBOR exceeded Term SONIA Reference Rate (TSRR).

When did you make the changes to my mortgage?

If your mortgage was impacted, the changes to your mortgage terms and conditions, including the replacement of LIBOR with KSLR, happened in November 2021.

What is a fall-back rate and how did the FCA develop the fall-back rate?

A fall-back rate is a rate of interest that can be used if the reference rate for a contract (mortgage) is unavailable for use, in this case LIBOR, and the lender has not been able to replace it with a new rate. The FCA reviewed the performance of LIBOR over 5 years to design its fall-back rate.

Why have you chosen not to use the FCA’s fall-back rate for my mortgage?

The FCA’s fall-back rate is only going to be published for a few years and so can only be used temporarily. By creating a rate that is calculated in the same way as the FCA’s fall-back rate and uses the same independently published information on interest rates, we avoid the problem of having to change your rate again when the FCA stops publishing the fall-back rate.

Will my rate always be the same as it would have been using LIBOR?

Like LIBOR, any variable rate is subject to change in line with the market conditions. KSLR has been designed to be as close as possible to LIBOR by ensuring the rate is the same as the fall-back rate set by the FCA. You will continue to receive notification of any changes to your interest rate and the impact this has on your mortgage as normal.

Will you continue to review my interest rate quarterly?

Yes, your interest rate will continue to be reviewed quarterly. Following each review, we will continue to notify you of any change in the amount you pay each month, or the interest that has been charged to your outstanding balance if your mortgage has reached the end of its term.

I’m in a fixed-rate period, will my fixed rate be affected?

No, your fixed-rate period will continue as per the terms and conditions of your mortgage. When yourfixed-rate period ends, you will move to a variable rate. If your mortgage was impacted by the change,the variable rate will be calculated using the new rate (KSLR).

Does this change the terms and conditions of my mortgage?

Yes, the terms and conditions of your mortgage have been updated to replace LIBOR with the new rate, KSLR. Changes have only been made in relation to calculating your interest rate. Before November 2021 you would have received a document setting out the changes to your terms and conditions called ‘Changes to your Terms and Conditions’.