Types Of Mortgage
Interest rates for capped mortgages will not rise above a certain maximum level. This normally applies for a fixed period.
With the discounted rate mortgage you do not pay the standard variable rate of the mortgage lender. They usually offer you a discounted rate over a set time period.
This type of mortgage is attractive to first time buyers because this meads that they will be paying less for their mortgage during the discount period.
Fixed Rate Mortgages can offer you the security of knowing that your mortgage interest rate will not change during the term of your fixed rate
A flexible mortgage allows you to make overpayments, and take payment holidays as your finances fluctuate
A type of mortgage in which the borrower only repays the interest on the loan for the duration of its term, and repays the full loan amount at the end of the mortgage period.
The idea of an offset mortgage is that any money that you have in your current account or savings is used to 'offset' your mortgage debt. So money that you would not normally pay in to your mortgage account can be deposited in to the offset acount and you can still withdraw it at anytime. This means that you only pay interest on what you owe overall
With a variable rate mortgage, the interest rate you pay can vary, moving up and down over time.
Every mortgage lender has a Standard Variable Rate (SVR) that is loosely based on the Bank Rate.
Each lender sets its own SVR, usually 1% to 2% above the Bank Rate. So where the Bank rate is 6.25%, a lender's standard variable rate may be 7.25%, 8.25% - or higher in some cases.
A tracker is much like a discounted mortgage, but it shadows the Bank of England base rate for an agreed period of time,
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