Tracker mortgage

We’ve put together a handy list of FAQs to provide answers to questions you and your clients may have.

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Product FAQs

Yes, our standard incentives are available which include the product with or without a fee and with incentives (free standard valuation, legals or cashback).
If your client wants to switch products before they are eligible to do so, they will need to remortgage to a new Kensington product in the usual way and would be liable to pay an ERC.
Yes, KSR could change in the period between submission of a mortgage application, receipt of the mortgage offer and the customer completing on the mortgage. That means that the rate the customer will pay at the start of the mortgage could differ from the rate quoted in the original illustration or in the offer letter. The rate will be calculated based on the value of KSR on the date of completion plus the fixed margin your client has agreed to pay.

For new mortgage applications the KSR rate reset takes immediate effect on our systems and documentation (normally the 10th of the month or if this falls on a weekend, the previous working day) but after completion the rate change applies to the customer’s mortgage payment from 1st of the following month.

Due to the difference in timing of BBR and KSR rate changes, KSR can temporarily be lower than BBR. Therefore, when reviewing illustrations, it is important to remember that over the life of the loan KSR will be equal to or higher than BBR. However, at the point of reset KSR will never be more than 1% above BBR.
The Kensington Standard Rate is a variable interest rate, set by us and reviewed on a quarterly basis. The KSR is based on the Bank of England base rate (BBR) plus an adjustment of between 0% (zero) and 1% to take account of our costs in funding a mortgage loan. Our KSR will not be set lower than the BBR or higher than 1% above the BBR at the time we set the rate.

If the Bank of England base rate is lower than 0% at the time we set the Kensington Standard Rate, we shall consider the BBR to be 0% (zero).
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%.
To find out the BBR rate click here: www.bankofengland.co.uk
You can find the current Kensington Standard Rate on the first page of our product guides:
Residential Product Guide
Buy to Let Product Guide
With the current market volatility, it is difficult for us to predict how the BBR and KSR will change however, on your client’s ESIS, we will provide an illustration of what their payments could increase to in a higher rate environment.

You can use our interest rate change calculator to get an idea of how an interest rate change could affect your client’s monthly mortgage payments.
After completion, following any adjustment to the KSR, we will write to your client at least 10 working days before their monthly mortgage payment is due to notify them of any changes to the payment amount. We also publish the new KSR rate on our customer website and intermediary product guides.
No, the variable rate Tracker mortgage is not portable. If your client decides to move home before the end of the term, they will need to apply for a new mortgage.
At the end of the variable rate initial period, the loan reverts to the applicable standard reversionary rate, which will also track the Kensington Standard Rate. Your client may be able to transfer to a new Kensington variable rate Tracker if available, a fixed rate mortgage, or remortgage the property.
We will notify them and you, as their broker, of their product transfer options as soon as they become eligible. Alternatively, they can remortgage to another lender, but the ERC will stay be payable.
If the Bank of England base rate decreases, any subsequent reduction in our variable Tracker rate would not take place until the next quarterly Kensington Standard Rate change. As our Fixed interest rates are based on swap rates and do not track base rates, this means that there could be a short period when our variable Tracker rate is higher than our Fixed rates.
A new KSR change and therefore any change to your client’s monthly mortgage payments will take effect on the 1st day of the following month.
If they are eligible for a new Kensington product at the end of their mortgage term, we will notify them and you, as their broker, of their product options as soon as they become eligible for a product transfer. Alternatively, they can remortgage to another lender.
As with our fixed rate products, your client’s interest rate will reflect our standard credit risk profile.
If they are eligible for a variable rate Tracker mortgage and we have Tracker mortgages available at that time, it will be shown as one of the product transfer options in the customer and broker Product Transfer portals.