Discounted Rate Mortgage

In the case of a discounted rate mortgage, the mortgage lender offers a discount on the Standard Variable Rate (SVR) for a specific period of time.

Discounted Rate Mortgage Example

For example, the variable mortgage interest rate may be 5% with a discount of 1.5%. The initial interest pay rate would therefore be 3.5%. If the variable mortgage interest rate rose to say, 6%, then the interest rate payable would rise to 4.5%.

Linked Discount Rate Mortgage

As the discount rate of the mortgage is linked to the standard variable rate, the borrower's mortgage payments will increase, if interest rates rise - so there is no certainty in budgeting. However, should mortgage interest rates decrease, the borrower will benefit from lower mortgage payments.

Repaying Your Mortgage

If you are deciding to get a discounted rate mortgage, then keep in mind that although it may be helpful to have a lower rate of repayment in the beginning, you must be able to keep up with mortgage repayments until the end of the mortgage contract as your interest rate may get more expensive.

Your Discounted Rate Mortgage

If you feel a discounted rate mortgage is the right option for you. click on the enquire now button below and fill out our quick and easy mortgage enquiry form. If you have any problems filling in your mortgage enquiry form, or have any other queries regarding discounted rate mortgages, you can contact us.