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1. LIBOR Transition
Why have you replaced LIBOR?
The interest rate benchmark LIBOR is expected to cease after the end of 2021. The FCA has received agreement from the LIBOR panel banks to continue to submit to LIBOR until end 2021. Lenders are required to transition to alternative rates before this date.
LendInvest has chosen the Bank of England Base Rate (BBR) as the alternative reference rate for its active Buy-to-Let products.
What is BBR?
BBR is the rate the Bank of England charges other banks and lenders when they borrow money. The Bank of England’s Monetary Policy Committee (MPC) sets the BBR. The MPC changes the BBR to influence the economy and to keep inflation low and stable.
The MPC normally meets 8 times a year. Changes to BBR impact the interest rate that many lenders charge for mortgages, loans and other types of credit they offer borrowers.
Why have you chosen BBR?
BBR is used extensively as a reference rate in mortgages, loans and other types of credit in the UK. It’s already used as the reference rate by a majority of buy-to-let lenders and most of our borrowers and brokers will be familiar with it.
We decided it was the most suitable reference rate to replace LIBOR with.
What loans will be affected by this?
This change only affects our active Buy-to-Let products.
Will this affect how my new BTL business works?
No. Buy-to-Let business will be processed in the same way with reversion rates the only area changed.