Mortgages

mortgage_img These pages are designed to help you understand, and provide a reference to, matters relating to your mortgage and insurance that we will be discussing with you.

These topics will generally be discussed with you as a part of the service provided to you. It is important that you have this document to provide you with a reference to the various topics you need to consider. If, therefore, you have any questions please do not hesitate to ask.

Types of Mortgages

To help you to decide the most appropriate mortgage to meet your requirements, the following is an explanation of what is available, a description of them, the advantages and disadvantages;

The different types are;

Fixed Rate
Variable Rate (including Flexible and Current Account, LIBOR and Tracker)
Capped Rate (and Collared)
Discount Rate
Cashback, Stepped & Combi

Fixed Rate Mortgages

A Fixed Rate mortgage is one where for a period of time the interest rate is set and will not be affected by changes in interest rates.

At the end of the period the interest rate will become the Variable Rate applicable at that time (see Variable Rate). Usually the rate is fixed between 2 and 5 years, although, sometimes longer periods are available.

Variable Rate Mortgages

A variable Rate mortgage is one that changes when the lender announces interest Rate changes.

So unlike a Fixed Rate, if the mortgage rate goes up then you will be paying more each month.

Equally if it goes down then you will pay less.

Capped & Collared Mortgages

A Capped Rate mortgage puts a ceiling on the rate for a period of time.

This means that the payments cannot go above the rate set during that time. It can of course change if the rates go down.

Discount Rate Mortgages

A Discount Rate gives you a guarantee that for a period of time your interest rate will remain at a fixed percentage below the Variable Rate.

Therefore if the current interest rate is 7% and your rate is discounted by 2% (i.e. 5%) if the interest rate were to be increased by 1% then your rate would rise to 6%.

Cashback, Stepped & Combi Mortgages

With Lenders coming up with ever more innovative products they are becoming even more diverse. Here are some examples;

Some Lenders offer a Cash Back. This is an incentive payment to the borrower, paid on completion of the loan.

Mortgages

Types of Mortgages

Fixed Rate Mortgages

Variable Rate Mortgages

Capped & Collared Mortgages

Discount Rate Mortgages

Cashback, Stepped & Combi Mortgages

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