With interest rates continuing to be volatile, the new Kensington 2-year variable rate Tracker mortgage tracks the market and will give you even more options to help your clients choose the mortgage that’s right for their circumstances.
The benefits of the Tracker mortgage
Available for Residential and Buy to Let properties
Offer across the Select residential and Core BTL product
Also available for customers with historic credit blips
Eligible Gifted Deposits accepted
Fee and no fee options plus product incentives
Available for self-employed and employed clients
How it works?
Our new 2-year variable rate Tracker mortgage has the same lending and credit criteria policy as our existing residential Select and BTL Core mortgage range but has a different rate structure.
It has a variable interest rate which is linked to our variable rate, the Kensington Standard Rate (KSR), plus a fixed margin. KSR reflects the Bank of England base rate, so with a variable rate Tracker mortgage, if the Bank of England base rate changes, your client’s monthly payments are likely to increase or decrease.
After the two years, your client’s mortgage will move to their reversionary rate (KSR plus a higher fixed margin) unless they remortgage or switch to a new variable Tracker if one is available. Alternatively, they will be able to switch to a fixed rate mortgage, or remortgage to another lender.
Who the new Tracker mortgage is for
This is a mortgage that could work for your client if they don’t want to fix their mortgage at today’s rates.
However, it is important that your client fully understands that whilst the mortgage may initially offer a lower rate than one of our equivalent fixed rate products, the interest rate, and therefore their monthly mortgage payment, could go up as well as down even in the initial ‘incentive’ period.
If you think our new Tracker mortgage could be for your clients, we've included some FAQs below to help you explain the pros and cons of our variable rate mortgage.
With the volatile economy impacting interest rates, our new 2-year variable rate Tracker mortgage will give you more options when it comes to helping your client choose the right product for their circumstances. It also supports our vision of providing a wide range of mortgage solutions for customers at different life stages and with different needs.
The mortgage tracks the Kensington Standard Rate (KSR) plus a set fixed percentage rate, which we combine to form the final mortgage rate. The fixed percentage rate is defined upfront for both the initial ‘incentive’ period and for the remainder of the loan post the initial ‘incentive period, but the KSR rate will change on a quarterly basis.
The Kensington Standard Rate (KSR) is our standard variable rate and is based on the Bank of England Base rate (BBR) plus an adjustment of between 0% and 1% to take account of our cost of funding the loan.
The KSR is set using the Bank of England base rate (BBR) which is the ’external rate’. The KSR will never be more than 1% above the external BBR rate and will never be lower than the external rate (or 0%, whichever is the greater) at the time of the quarterly reset. It is rounded up or down to the nearest 0.05%.
We review the Kensington Standard Rate (KSR) four times a year on the 10th March, 10th June, 10th September and 10th December (or the immediately preceding working day if the relevant date does not fall on a working day). The current value of KSR can be found on the front page of our Product Guides.
The Bank of England base rate (BBR) is the interest rate set by the Bank of England’s Monetary Policy Committee (MPC). The current rate is published by the Bank of England at https://www.bankofengland.co.uk/boeapps/database/Bank-Rate.asp. The BBR is the rate the Bank of England charges other banks and other lenders when they borrow money, so it influences the interest rates that many lenders charge customers to borrow money for things like mortgages and loans.