Mortgage Products

Jump to Variable Rate Mortgages Discounted Mortgages Base Rate Tracker Fixed Rate Mortgage Capped Rate Mortgage Cashback Mortgages Offset Mortgages Flexible Mortgages Overpayments Underpayments and Payment Holidays Borrowback/Borrow Extra

Variable Rate Mortgages

With this type of product the monthly repayment figure can either increase or decrease in accordance with the Lenders interest rates at the time. You always pay the current rate with no hidden extra charges. The rate is normally influenced by the Bank of England’s Base Rate. Be aware that this can vary amongst the lenders in the Market place. Generally there are no arrangement fees payable. It is usually the rate that customers revert to after a fixed, capped or discount period ends.

Discounted Mortgages

With this product a discount is taken off the lenders standard variable rate for a period of time. It offers a true saving. This product is beneficial if the interest rates decrease or are likely to. After the discounted period it will revert to the standard variable rate. This discount rate can also rise and fall in accordance with the standard variable rate. Please be aware that once your discount period ends the monthly payments will increase.

Base Rate Tracker

This is a variable rate that is linked to the movement of a prevailing rate such as the Bank of England Base rate or the London Interbank Offered Rate (LIBOR). The pay rate will be charged as a certain percentage above or below the Bank of England Base rate or LIBOR for a specified period of time. This would be considered as a truly economic rate.

Fixed Rate Mortgage

This type of product is ideal if you want the security of a guaranteed repayment figure for a set period of time, as the mortgage interest rate will remain the same for the stated period. In general this can be for a period of 2, 3, 5,10 or 15 years. Generally, the shorter the term of the fixed rate, the lower the interest rate. After the period finishes then the rate will revert to the mortgage lenders standard variable rate. An arrangement fee is often charged by the lender. An early repayment charge may apply.

Capped Rate Mortgage

This product guarantees that the mortgage rate will not go over a certain percentage thereby giving a maximum known cost. For example if the mortgage rate was capped at 7% and the rates rose to 8%. Interest payable would still be at 7%. However if the interest rate fell to 6% then the rate payable would be 6%. After the capped rate period the rate will revert back to the standard variable rate. This is often arrangement fees and an early repayment charge.

Cashback Mortgages

The Lender, as an incentive, will offer a lump sum once the mortgage has been completed. In essence the idea is that a percentage of the total amount or a set sum will be returned to you in the form of a cashback. This product is ideal for first time buyers who have a large number of initial costs. However if the mortgage is re-deemed early then the cash-back may be recoverable by the lender.

Offset Mortgages

A flexible mortgage linked to a current and / or saving account held with the lender. Each month or day, the amount you owe on your mortgage is reduced by the amount in these accounts before working out the interest due on the loan. So as your current account and saving balances go up you pay less interest on your mortgage. You must be aware that you will not receive any interest on money held in the current or / and the savings account whilst offset occurs.

Flexible Mortgages

A flexible mortgage gives you some scope to change your monthly payments to suit your ability to pay. It is also useful if you want to pay off your loan more quickly. Several flexible features are becoming common and they are not limited to mortgages with ‘flexible’ in their name. Here are some flexible features.

Overpayments
You can pay more than your normal monthly mortgage payment or pay off a lump sum, or both.

Underpayments and Payment Holidays
You pay less than the normal monthly payment for a limited period. You may even be able to stop making payments altogether. This could be a useful option if say you lose your job or take time off to care for a child. Some lenders will only allow this if an overpayment has been made previously.

Borrowback / Borrow Extra
You can borrow back previous overpayments or borrow extra without further approval from your ender provided the total loan does not exceed a pre agreed overall limit.

This product normally is subject to interest usually being calculated on a daily basis. A downside is that it would not always provide the most competitive rate.