Mortgage Schemes

Fixed Rates

The mortgage is fixed from completion usually for a number of years or the product will state an end date. At the end of this period you will revert to the lender’s standard variable rate unless stated otherwise. Some lenders will revert to Bank of England plus a differential. Most lenders will allow you to make additional capital repayments during the fixed rate period in the region of 10% of the original loan balance. This will be detailed in your Key Facts Illustration.

Variable Rates

These rates are linked to the lender’s standard variable rate and are usually the rates that clients find themselves on when their deal period ends. Some lenders will offer variable rates for new purchaser’s as a way of borrowing money without a penalty at any point in time. We have seen the number of these options diminish over the last few years as lenders do not want to find themselves being used for short term lending.

Discounted mortgages

These rates are usually a discount off of the standard variable rate and last for a set period of years. These rates are variable and if the Bank of England increase their base rates usually lenders increase their standard variable rate. Although you will still have the discount when interest rates are moving so will your payments. Your Key Facts Illustrations will show you how much a 1% increase will alter your monthly payments.

Tracker Mortgages

These rates track Bank of England and are subject to change. Usually there is a rate you pay over the Bank of England for a period of years. When the Bank of England changes the base rate then your monthly payments will invariable change the following month.

Capped Mortgages

The rate has a cap for a period of years and you are guaranteed not to pay more than that capped rate of interest. These are far a few between and are popular in volatile economic environments.