Rates and repayment methods

Further information on interest rates and repayment methods.

Kensington Variable Rate (KVR)

Our Prime mortgage products track the Bank of England Base Rate (Bank of England UK Repo rate) set by the Bank of England from time to time. Interest is calculated daily.

Repayment methods

Borrowers can choose between a capital repayment and an interest only mortgage, or a combination of both.

Interest only

If the borrower chooses an interest-only mortgage it is their responsibility to ensure that an appropriate repayment vehicle is in place for when the loan term expires. The borrower should regularly check that the repayment vehicle is on target to repay the outstanding amount of the mortgage.

If the borrower uses an endowment policy as the repayment vehicle, the Association of British Insurers and its members have agreed to a Code of Practice to ensure formal reviews of endowment mortgage policies are carried out regularly. Under the ABI Code, insurers will tell the policyholder if a shortfall is likely to arise where the policy was bought with the intention of paying off all or part of a mortgage.

Part Capital Repayments

If the borrower repays part of their loan early, the interest charged on the account is adjusted with immediate effect and the payment is reduced on the next payment date.

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