Discount Mortgages
Discount mortgages are popular because they are usually carry a low interest rate in comparison with the other mortgage products available, which can make them relatively cheap. The reason these rates are so competitive is because the lender has moved any risk emerging from interest rate fluctiations onto the borrower. The discount rate is based on the lenders own internal Standard Variable Rate (SVR)for a set term. For example 1.5% discount on the lenders SVR for 2 years.
This mortgage acts like a variable rate mortgage. Its based on the lenders own SVR which in turn is based on the Bank of England Base Rate (BoEBR). This means mortgage payments can go up or down in line with increase or decrease the SVR and all at the lenders discretion. Unlike a fixed rate mortgage there are no guarantees what your monthly payments will be if the SVR moves, but you may well find that because the initial rate is so low you can handle a few increases over the term of the deal.
Not ideal for borrowers on a tight budget who need consitency in mortgage payments, but can work out very cost effective for those who are willing to take a risk and can handle increased payments if the SVR increases.
At North Mortgages our Mortgage Experts will take care of everything on your behalf. Remember, we source mortgages from the whole of the market, so you know your getting the best deals available and all tailored to suit your personal circumstances.
Call NOW on: 08000 949 595 or contact us today to arrange a Call Back.
