Fixed Rates: With a Fixed Rate mortgage the interest is ‘fixed’ for a given period of time. Fixed rates appeal to those who want guaranteed repayments for a specified period, but they lack flexibility and you are likely to face charges if you want to repay the mortgage early. A fixed rate mortgage provides the security of fixed mortgage repayments until an agreed date, no matter what happens to interest rates.
Base Rate Tracker: Whereas Standard Variable Rate mortgages tend to follow the Bank of England’s base rate, Base Trackers are tied to it. Lenders set Tracker Rates a certain percentage above or below the Bank of England’s rate and guarantee to mirror any increases or decreases.
Discounted Rate: With a Discounted Mortgage the interest is set below the LIBOR or Standard Variable Rates for a specified period of time. This means that payments can rise or fall in-line with changes in the Bank of England’s base rate. Once the discounted period is over; interest typically reverts to SVR or LIBOR rates, often with early repayment charges attached.
Standard Variable Rate: Standard Variable Rates (SVR) are set by lenders and generally rise and fall to reflect changes in the Bank of England’s base.
LIBOR Rate: LIBOR stands for London Inter Bank Offered Rate and refers to the rate at which banks lend to each other in the City. LIBOR rates are comparable to the Standard Variable Rate, with one notable exception: they are calculated every three months. During this period the rate is fixed which means borrowers will benefit if the Bank of England base rate rises. Conversely if rates fall you may lose out.
Your property may be repossessed if you do not keep up repayments on your mortgage.
For more information, please call us on 01923 352235 or use the contact form.