Discounted Rate Mortgages | Discount Rate Mortgage
Discounted Rate Mortgages
This is a variation on the Standard Variable Mortgage Rate.
In order to maximise their business, the lenders will offer a discount off the standard variable mortgage rate and apply the discount for a period of time. The borrower's monthly payments will alter to reflect the change in the lenders standard variable mortgage rate but will stay a margin below.
Although a discounted rate means fluctuating payments, a big advantage is that from day one the borrower knows by how much the mortgage will increase on the day the discount ends. In other words, if the discount is for example 1% off the rate, and this represents a saving of £75 a month, then when the discount ends the payments will increase by £75, irrespective of any other movements in the meantime.
Discounted rates can be the lowest rates in the market at any given time.
So if, as a borrower, you believe that the economy is going to remain fairly stable in the foreseeable future, and as a result there should be no need for the Bank of England to increase base rates, then a discounted rate will appeal.
For more information on discounted rate mortgages or to apply for a discounted rate mortgage please follow the link - Discounted Rate Mortgages >
- Your home may be repossessed if you do not keep up repayments on your mortgage.
- Changes in the exchange rate may increase the sterling equivalent of your debt.
- The FSA do not regulate certain mortgages.
- The advice and/or guidance contained within this site is subject to the UK regulatory regime and is therefore targeted at consumers based in the UK.