discount rate mortgages

Discount Rate Mortgages

A discounted rate gives you a guarantee that, for a period of time, your interest rate will remain at a fixed percentage below the variable rate. Therefore, if the current interest rate is 7% and your rate is discounted by 2% (i.e. 5%), if the interest rate were to be increased by 1% then your rate would rise to 6%.

advantages of discount rate mortgages

* Gives a reduced repayment over the period of the discount.

* Repayments will reduce with interest rate falls.

disadvantages of discount rate mortgages

* Repayments will rise with interest rates.

* May have to pay application and/or arrangement fees.

* Early repayment charge.

Your property may be repossessed if you do not keep up repayments on your mortgage.

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