Mortgage Schemes
The variety of mortgage schemes currently available gives the borrower a greater choice than ever before. Below you will find a general description of each scheme along with the advantages and disadvantages. If you are unsure which scheme best suits your needs, simply call us and one of our qualified advisors will be happy to discuss your needs or, send your enquiry online and we will call you back. After all, we are here to help!
The Standard Variable Rate Mortgage
Due to the wide range of mortgage products currently available, the conventional standard variable rate mortgage is now much less popular. Borrowers are more likely to remortgage with another lender to take advantage of the benefits offered by other products.
Upside - No set up costs or early repayment charges.
Downside - No protection is offered against interest rate increases.
The Fixed Rate Mortgage
You can usually fix your rate for 2, 3, 5, or 10 years. This means that you are able to budget in the knowledge that your mortgage payments will not increase for the fixed rate period. We have access to some of the best fixed rate mortgage deals in the UK!
Upside - Protection against increases in the interest rate for the fixed rate period enabling you to budget with certainty.
Downside - No advantage can be taken of any decrease in interest rates for the fixed rate period. There is usually a lenders arrangement fee to pay and an early repayment charge should you redeem your mortgage before the end of the fixed rate period. Fees and early repayment charges vary between lenders.
The Capped Rate Mortgage
The borrower benefits in two ways. Firstly, the rate is capped at a certain level for a period of time protecting the borrower against sharp increases in interest rates. Secondly, advantage can be taken of all reductions in the lenders standard variable rate. We have access to some of the best capped rate mortgage deals in the UK!
Upside- Incorporates the best of both worlds.
Downside – Likely to incur arrangement fees and early repayment charges.
The Discounted Rate Mortgage
This type of mortgage simply offers a discount off the lenders standard variable rate for a given period of time.
Upside – You will benefit from any decrease in the lenders standard variable rate.
Downside – Equally, should the lenders standard variable rate increase, so will yours! There is usually a lenders arrangement fee and early repayment charges for the discounted period. We have access to some of the best discount mortgage deals in the UK!
The Base Rate Tracker Mortgage
This is also a variable rate mortgage. The rate charged is linked to the Bank of England Base Rate (BOEBR) for a given period rather than the lenders standard variable rate. We have access to some of the best tracker rate mortgage deals in the UK!
Upside - Your rate will reduce immediately following a decrease in the BOEBR ( this is not necessarily the case with a Discount Mortgage ).
Downside – Your rate will also increase if the BOEBR goes up. Again there is usually a lenders arrangement fee and early repayment charge.
The Flexible Mortgage
To be classed as a flexible mortgage, the scheme will incorporate the following basic features:
- The facility to make over payments without penalty and under payments if the borrower's circumstances warrant it.
- Interest calculated on a daily basis
- The facility to take payment holidays if the borrower's circumstances warrant it
- The lender will normally impose set limits for overpayments, under payments and payment holidays.
- Many flexible mortgages offer a cheque book to take advantage of a drawdown facility.
- There are a number of lenders that offer current account mortgages.
The main advantages of a current account mortgage are that all personal financial transactions can be carried out under one account. The combination of salary credits and the calculation of daily interest can greatly reduce the amount of interest paid over the term of the mortgage.
Offset mortgages work in a similar way but take advantage of your savings to offset interest charged on the mortgage.
Because we have access to the whole of market, we are able to offer you the widest possible choice. For more information on the best scheme for you, please contact one of our advisors for friendly, professional advice or, send your enquiry online and we will call you back. After all, we are here to help!
