A traditional mortgage is where rates can go up and
down. You will be offered a discount off this variable
rate for a period of time, which should be fitted to
your circumstances. For example, known income increases,
bonuses, or childcare arrangements can be overlaid into
a scheme.
'Standard variable rates' are funded by money from savers.
These rates do not always follow the Bank of England
Base Rate and the lenders history of mortgage rates
should be taken into account. We have detailed research
into this.
One of the concepts that has come from the benchmark
ideas is that these mortgage rates follow or track the
Bank of England Base Rate. This eliminates the risk
of the lender not following any cuts The Bank of England
may implement, which has often been the case. These
are known as tracker mortgages.
Even with interest rate rises several mortgage lenders
have increased their mortgage rates by a higher amount.
Tracker mortgages are therefore more transparent and
fairer.
Please note that many variable and tracker mortgages
now involve a fee.
A variable rate mortgage is important when interest
rates are falling.
See our mortgage
news page for interest rate information.
YOUR
HOME MAY BE REPOSSESSED IF YOU DO NOT
KEEP UP REPAYMENTS ON YOUR MORTGAGE.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST
YOUR HOME
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