Mortgage Products Overview

Variable Rate Mortgage

Variable Rate mortgage is based on the standard rate of interest set by the lender. The monthly payment goes up and down, generally in line with Bank of England bade rate.

Discount Mortgage

The rate of interest charged is the variable rate less an agreed discount for a period of years. The rate charged will still very but will be below the standard variable rate by the agreed discount. Sometimes penalties are imposed if the mortgage is redeemed within the discount period.

Fixed rate mortgage

The rate of interest charged is fixed for a given period of time as agreed with the lender usually between 1 and 5 years but can be for the term of the mortgage. Your monthly payment will not change during this period. At the end of the fixed rate period your mortgage will revert to the variable rate. During the fixed rate period penalties are normally imposed if you redeem all or part of the mortgage early.

Capped mortgage

A capped rate mortgage is variable rate mortgage which has a fixed upper rate limit to which it cannot go above. It can, however, go down if the variable rate falls below the capped rate. The capped period is normally between 1 and 5 years but can be longer penalties may be payable if the mortgage is repaid during this period.

Flexible mortgage

Interest is calculated daily or sometimes monthly, unlike the traditional mortgage where interest is usually calculated annually. The interest charged is generally variable. Overpayments are allowed and payment holidays are allowed. By making overpayments, if one have a repayment mortgage, it is possible to reduce the term of the mortgage considerably. Most lenders normally offer, within the package, are reserve fund can drown upon for any purpose. Flexible mortgages are normally penalty free.

CRTB

The right to buy means you can buy your home from a local authority, a non-charitable housing association or a housing trust. Usually a “right to buy” mortgage will cost less than on the open market because as a tenant you can obtain a discount on the loan. Under the right –to buy scheme, council tenants are entitled to a 32% discount on the value of their house after they have lived in it for two years, followed by a further increase of 1% for each additional year, up to a maximum of 60% For flats the available discount rise to 70%.