Follow-on rates are the follow-on interest rates that your mortgage will switch to once your initial tracker rate or fixed rate mortgage deal finishes.
All of our mortgage products (fixed or tracker rates) will switch to a follow-on ‘tracker’ interest rate when your initial deal finishes. Our follow-on tracker rate follows the GBP 3 Month Libor Rate. ‘Libor’ stands for London Inter-bank Offered Rate and is a global benchmark reflecting the interest rate the world’s leading banks are willing to charge to lend money to each other. It updates every day at 11 am and is an average of the most common rates. However, in order to keep some level of stability in your monthly mortgage payments, at Molo we update the Libor rate you’ll be charged once every three months. This will be on the 15th March, June, September and December.
Once following the Libor rate, there’s a chance that your monthly payments could vary every three months. If the 3-month Libor rate has fallen, so will your payments. If, however, the 3-month Libor rate has risen, your monthly payments will increase. Many people tend to look at remortgaging anywhere between 6-12 weeks before the end of their fixed period. This is a great opportunity for you to explore available deals with your current mortgage lender or to shop around in the wider market.