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.

Advantages

• Can be very useful, especially to cover moving costs and any work or redecoration that may need doing

Disadvantages

• If the mortgage is redeemed within a preset period some or all will have to be paid back to the Lender

Stepped Rate

Instead of there being a period of say Fixed Rate then going to the Standard Variable Rate there may be Stepped Rates. This could be 2 or 3 Fixed Rates "stepping" up before the Standard Variable Rate applies. For instance a mortgage may have a fixed rate of 5.5% for the first year, then a 6.5% rate for another year an then after that the Variable Rate would apply.

This could also apply to Stepped Rates for Capped or Discounted Rate Products. In some cases the product may be more than one e.g. Fixed Rate for one year followed by a Discounted Rate for another and then the Standard Variable Rate.

Combination Rates

It is possible to get products that are a combination of two rates. For instance you may be able to fix 50% and have the other 50% at the Variable Rate. The Fixed Rate would apply for a period of time before the full mortgage is at the Variable Rate.