Variable

Interest rates set by lenders rise and fall throughout the term of the mortgage. Your mortgage payments will fluctuate.

Discounted

Some lenders offer a discount on their standard variable rates as an incentive for their new borrowers. These discounts are usually for a short period after which time the standard variable rate is applied. With a discount mortgage, your monthly payments can still rise or fall.

Base Rate Tracker

The Bank of England sets its base rate each month independently of mortgage lenders. The interest charged is linked directly to, and will rise and fall in line with, the Bank of England base rate. This type of mortgage may also be offered with a limited period discount or other incentive.

Cashback

On completion of the purchase a sum of money is paid to the purchase if a cashback is applicable.

Fixed

For a limited period, the interest rate applied to these mortgages is fixed regardless of the variable rates. This gives stability of payment and is clearly a benefit during times of rising interest rates, but could be a disadvantage if interest rates were to fall.

Capped

Capped mortgages set a maximum limit on the interest rate charged. Payments and rates may rise or fall, but will not exceed this maximum limit The maximum limit will usually last for a limited period only.

Flexible

Under and over payments are accepted and payment holidays are allowed. Some lenders allow overpayments to be subsequently ‘borrowed back’ creating a combined savings/mortgage account. Others allow the linking of savings accounts, current accounts and even credit cards to ensure the most efficient use of the borrowers’ money.