This notice is being provided to you because we are just about to collect personal data from you. It is issued by New Mortgage Finance Limited, trading as NM Finance. It explains how we use your personal data.
Lawful conditions for processing personal data
We will only process your personal data when we meet one of the following lawful conditions:
When we have a lawful contract with you;
When it is our legal duty;
When we have a legitimate interest;
If we need to act in your vital interests; or
When you have provided us consent to process it.
If we process your personal data that has been obtained from someone other than you, we will let you know without undue delay.
Who is collecting your personal information
NM Finance, Portal House, 7b Alkmaar Way, Norwich International Business Park, Norwich, NR6 6BF. The point of contact for all personal data related queries is the Data Privacy Manager.
Why we collect your personal information
We collect personal information provided by you to enable us to create a contract with you which we then fulfil in accordance with the terms and conditions of the contract and our Data Protection Policy. We also need to collect your personal information to meet the legal & compliance obligations placed upon us.
Your information may also be used for other specific purposes but only after you have given your consent, for example, to receive newsletters.
Automated decision
When obtaining a Decision in Principle (DIP), also referred to as an Agreement in Principle (AIP), we submit your information via the Lender’s online automated decision-making process. We do not use any in-house automated processing mechanisms.
Appointees who are instructed to act on your behalf, for example a solicitor.
We will never sell or share your information with marketing companies.
Security of your personal information
We take all reasonable technical and procedural precautions to prevent the loss, misuse or alteration of your personal information. All business data is stored off-site on a server at a secure location and managed by a trusted third-party contractor. NM Finance Ltd do not operate internationally; our business services are limited to the United Kingdom.
Retention of your personal information
We will retain your information for as long as it is needed to provide you with our services and manage our relationship and also to comply with our legal obligations, resolve disputes and enforce our agreements. In practice this could be throughout your lifetime, but this does not prejudice your right to request that your personal data is no longer processed by us (The Right to Object).
Your Rights
The GDPR extends your rights in respect of your personal data. It should be noted that these are qualified in so much that they do not necessarily apply in all situations. The ‘rights’ are listed below.
Right to be informed;
The right to access;
Right to rectification;
Right to erasure;
Right to restrict processing;
Right to data portability;
Right to object; and
Rights related to automated decision making.
For a more detailed explanation about each of these rights please look at our Data Protection Policy or the Information Commissioner’s Office (ICO) website using
Exercising your rights and access to your personal information
If you wish to exercise your right to access to your personal data, please contact the Data Privacy Manager. We will then contact you to check your identity and may request documents to prove it. For all other queries regarding our processing of your personal data and the exercising of all of your rights, please contact the Data Privacy Manager.
Your options if you have a complaint
If you do have cause for concern or a complaint regarding the way we are handling your personal data, we ask that you contact us in the first instance. This way we can resolve any issues at the earliest opportunity.
If you are still unhappy, or you do not wish to contact first you are, in any event, entitled to complain to the ICO. You may also seek judicial remedies against us or any of the third parties we interact with on your behalf, for damages (both material and non-material) arising from breaches of the GDPR. For more information please visit the ICO website using https://ico.org.uk.
The Bank of England base rate influences all loan and mortgage interest rates in the UK. Generally, a higher base rate means banks, building societies and lenders are likely to increase the cost of mortgages, whilst savers could expect a slightly higher rate of interest on their savings.
Why does the Bank of England base rate change?
Base rate changes are a response to a change in inflation. To put this in context, in 2022 the base rate stood at 0.1%, but steeply increased to 5.25% where it remained from August 2023 to August 2024. A major change, compared to the previous 14 years of very low rates.
The reason for the increase is mainly to try to curb inflationary pressures. Inflation, measured by the Consumer Price Index (a measure of the cost of goods and services) in May 2023 sat at 8.7% – nearly four times the BoE target of 2%. The rise in the Bank of England base rate endeavoured to bring this down, and in 2024 inflation reduced down to the target 2%.
Governor Andrew Bailey explained the reasons behind the latest decision, including these key points source:
Today we held interest rates at 4%. Since August last year, we have been able to cut rates five times.
Inflation has come down a long way from its peak three years ago, but it remains too high.
In our decision to hold interest rates today, we have balanced the risk that above-target inflation becomes more persistent against the risk that demand in the economy is weakening, which might cause inflation to fall too low.
If inflation stays on track, we expect to be able to gradually cut rates further.
NM Finance Graphic – Data: Bank of England
“Today’s decision to hold rates at 3.75% was a close call – the MPC voted five-four in favour of keeping them unchanged. We still anticipate one or two further reductions this year, though much will depend on how inflation and unemployment develop over the coming months. Inflation is likely to reach the 2% target sooner than expected, but we need to monitor unemployment rates, which may rise throughout the year. Despite the hold, borrowing remains competitive and lenders are very much open for business.”
MAx Mace, Managing director, NM Finance
Does a DECREASE in the Bank of England base rate mean my mortgage will get cheaper?
For most borrowers, the answer is no: the majority people with mortgages are on a fixed-rate deal, which means your monthly repayments will stay the same.
If you are on a Fixed Rate Mortgage:
Four out of five mortgages in the UK are currently fixed rates. This means that borrowers will not see a decrease in the cost of their mortgage until their current product ends and they choose to look for a new, cheaper product.
IF YOU REMAIN ON THE SAME MORTGAGE AFTER THE FIXED RATE RUNS OUT, you will end up on your lenders Standard Variable Rate (SVR) – this is often more expensive than your fixed rate. The rate you pay MIGHT come down when the base rate declines. But SVRs can be changed by lenders at a whim, so you must keep an eye on it.
If you are on a standard variable or tracker mortgage
Tracker mortgages – most tracker deals have rates directly linked to the base rate, so if it changes, your mortgage rate will change alongside it.
Standard Variable Rate (SVR) – as mentioned above, this is your lenders standard rate you are moved onto when a fixed rate ends, and is often more expensive. If you’re on your lender’s SVR, the rate you pay MIGHT come down when the base rate declines, but it is not guaranteed
Why Mortgage Rates Haven’t Fallen as Much as the Base Rate: Our Guide to Swap Rates
Discover why swap rates, not base rates, determine your mortgage cost
What does an INCREASE in the Bank of England base rate mean for my mortgage rates?
If you are on a Fixed Rate Mortgage:
Four out of five mortgages in the UK are currently fixed rates. This means that borrowers will not see an increase in the cost of their mortgage until their current product ends and it’s time to remortgage.
In June 2021 the average 2-year fixed rate was 2.17%, in June 2023 the average 2 year fixed rate was 6.85%. With these mortgages now coming up for renewal, we’ve provided some examples below of how mortgage payments might change (all based on 25 year term):
Nick has an outstanding mortgage balance of £152,000. An increase in mortgage rate from 2.17% to 6.85% will increase his monthly payment by £408
Jennifer & Mark have an outstanding mortgage balance of £325,000. An increase in mortgage rate from 2.17% to 6.85% will increase their monthly payment by £861
Amelia has an outstanding mortgage balance of £479,000. An increase in mortgage rate from 2.17% to 6.85% will increase her monthly payment by £1,270
If you are on a standard variable or tracker mortgage
Tracker mortgages – most tracker deals have rates directly linked to the base rate, so if it changes, your mortgage rate will change alongside it. The base rate is currently at 4.5%. So, if the interest rate on a tracker mortgage was the base rate +1%, the amount of interest you would pay is 5.5%.
Standard Variable Rate (SVR) – this is your lenders standard rate you are moved onto when a fixed rate ends, and is often more expensive. If you’re on your lender’s SVR, the rate you pay MIGHT come down when the base rate declines. But SVRs can be changed by lenders at a whim, so you must keep an eye on it.
If interest rates rise, it could have a significant effect on any borrower with these mortgages as monthly payments will incrementally increase. However, as rates change it’s always a good idea to have a free, no obligation conversation with a whole of market mortgage broker who can advise you on the best options for you and your specific situation. Brokers can also provide advice about best-buy deals which can be secured at a lower rate than the current average fixed mortgage rate of 4.77%. (source: Rightmove)
The buy to let market is much more challenging, simply because clients often want to borrow at 75-80% loan to value (LTV) and to borrow at that level, the stress tests that the lenders implement are causing a problem, without a doubt. Within this sector, we are still seeing customers take five year fixed rates. It can enable them to borrow more just by the way that their stress tests are calculated. Where clients are slightly lower geared, they’re taking advantage of a two year fixed rate or a two year tracker or discount rate, dependent on their attitude to risk. The best option is to speak to a mortgage broker who can review all of the options, as early as seven months before your current term comes to an end.
For anyone requiring a mortgage:
When taking out a mortgage, you need to consider how changes in the economy could affect your repayments in the medium to long term.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
Does a Bank of England base rate change impact lenders affordability criteria?
Whilst lenders do not typically change their affordability criteria in line with a rate rise, in August 2022, The Bank of England abandoned its ‘stress test’ recommendations for approving new mortgages. Since 2014, mortgage lenders were required to assess whether a home buyer could continue to repay their mortgage in the event of a three percent rise in interest rates. Therefore this change could make it slightly easier for borrowers such as freelancers and the self-employed to secure a mortgage.
Affordability and lending limits are always an issue and as the rises in the cost of living were absorbed into affordability calculations, it could impact the level of borrowing offered to customers and will undoubtedly be something that lenders continue to monitor.
What should you do if interest rates change?
Now is a good time to review your existing mortgage alongside your current requirements to determine if you should consider remortgaging or taking out your first mortgage. Particularly if you are currently on your bank’s standard variable rate. Likewise, you may find that you can access a better rate by moving to a different lender when your current mortgage deal comes to an end.
In the last decade, borrowers benefited from extraordinarily low mortgage interest rates, due to the Bank of England base rate being at an all time low. In 2007, the Bank of England base rate sat at 5.5% and an average variable mortgage rate was 7.5%. In 2008, at the height of the financial crisis, the Monetary Policy Committee (MPC) dropped the base rate to just 2%. It was reduced again in 2009 to 0.5% when a variable mortgage rate was around 2.5%
Lowest base rate in history
In 2016, the base rate was at its lowest point in history; 0.25%. Borrowing at this time and fixing your mortgage rate for a long period could have saved you thousands. This interest rate has been stable for many years and has encouraged widespread spending, that demand has increased prices, and thus inflation, leading us to the corrections we are currently seeing.
