In the following paragraphs, I will be explaining the different types of mortgage products that are offered in the mortgage market, hopefully after reading this article you'll have a better understanding of mortgages, and the products obtainable, and therefore be able to choose which is the best option for your circumstances.
Firstly, I am going to speak about variable rate mortgages. There are four different kinds of variable rate mortgages, they are; standard variable price, discounted, cashback and trackers. Although all of these products are slightly different they all are variable, which means they can go up or even down.
A standard variable rate mortgage is probably the most frequently heard of mortgage product, the interest rate will be different throughout the term by reflecting the influences of things for example; the Bank of England base rate, competitors' prices, and the bank's current base rate.
A discounted product relates to the standard variable rate but offers a discount for a set time period i. e two years, however some of these deals come with heavy early redemption penalties if you will no longer want the mortgage when you are still within the discounted period.
Cashback mortgages offer an incentive of a percentage from the loan paid as a lump sum in the beginning of the mortgage i. e 3%, however early repayment charges are very commonly applicable on these kinds of mortgages, and the cash back may have to become repaid when the term expires.
Firstly, I am going to speak about variable rate mortgages. There are four different kinds of variable rate mortgages, they are; standard variable price, discounted, cashback and trackers. Although all of these products are slightly different they all are variable, which means they can go up or even down.
A standard variable rate mortgage is probably the most frequently heard of mortgage product, the interest rate will be different throughout the term by reflecting the influences of things for example; the Bank of England base rate, competitors' prices, and the bank's current base rate.
A discounted product relates to the standard variable rate but offers a discount for a set time period i. e two years, however some of these deals come with heavy early redemption penalties if you will no longer want the mortgage when you are still within the discounted period.
Cashback mortgages offer an incentive of a percentage from the loan paid as a lump sum in the beginning of the mortgage i. e 3%, however early repayment charges are very commonly applicable on these kinds of mortgages, and the cash back may have to become repaid when the term expires.
