Interest rates are charged as a margin over a currency reference rate (for example Bank of England Base Rate, near Risk Free Rates (RFRs) such as Sterling Overnight Index Average (SONIA) or the cost of funds for fixed interest rate loans.
- Variable rate1 – you pay an agreed interest rate margin, which is added to reference rates such as the Bank of England Base Rate or a RFR. This allows you to benefit if interest rates fall, but could leave you exposed to increased repayments if rates rise.
- Fixed rate2 – you have a fixed payment amount so you can be sure of the amount of your repayments for the fixed term.
* Non-sterling currencies and Risk Free Rate (RFR) linked facilities, such as SONIA, SOFR, TONAR or SARON are subject to eligibility criteria and only available to businesses with turnover of £25m or above. Contact your relationship manager for further information.