Discounted mortgage information
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Looking for discounted mortgage information or advice?
First Mortgage can help you understand how discounted mortgages work and find the best deal for you. With hundreds of deals available, often some of the cheapest deals on the market, discounted mortgages can be arranged with hundreds of different companies across the UK. We can help you find the deal that suits you best and offers great value for money.
What is a discounted mortgage?
Discounted mortgages work in a similar way to tracker mortgages. Both are variable loans, meaning that the rate can change during your mortgage term. However, unlike a tracker, a discounted mortgage doesn’t follow the base rate. Instead, discounted mortgages offer a reduction in the lender’s SVR (standard variable rate) for an agreed period of time. Usually, this is around 0.5 -1.5% less than the standard rate for a duration of 2-3 years.
Discounted mortgage pros and cons...
Discounted mortgages are good deals for people able to manage any fluctuations in their monthly repayments.
If interest rates fall, you will benefit from lower payments.
They are some of the cheaper available mortgages, but they are tied to a risk of increased interest rates.
People who prefer to know exactly how much they will pay each month will probably prefer a fixed rate mortgage.
Discounted loans only stay at the lower rate for a certain period (usually 2-3 years). After that the repayments will return to normal.
As with any variable loan or mortgage it is important to remember that payments can go up as well as down.
If you want to switch to another type of mortgage before your term ends, you may have to may a penalty fee.
To find out if discounted mortgage is right for you, call us on 0845 603 1525 and talk with one of our experienced consultants.
You may also want to view other types of available deals, including fixed rate, tracker, flexible, capped, offset, current account and cashback mortgages.
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