Rate Options

What are they?

There are many types of ‘Rate Options’ available and Lenders are increasingly offering more choice. It is important to choose the Rate Option’ that most suits your circumstances.

Our advisors will always consult with you and help you decide the type of mortgage that best suits your needs.

With many deals, an arrangement fee may be charged by the lender, and an early repayment charge may also apply. Full details will be supplied by our Advisers to help you understand the full costs involved.

Here are brief explanations of the various mortgage schemes available.

Variable rate

Your monthly payment may fluctuate in line with any changes in the base rate.
The interest rate charged by your lender is largely influenced by changes to the Bank of England base rate.
Some lenders will adjust your payment as the rate changes.
Other Lenders review annually and adjust accordingly.
Early redemption penalties may apply

Capped rate

Similar to a variable rate, however your rate will not exceed a specified upper limit for a fixed period, even if interest rates rise beyond that point.
Capped rates are usual applied for a fixed period (Typically 2-5 years).
This product allows you to take advantage of interest rate cuts, with the security of a maximum rate payable, should rates rise.
Early redemption penalties may apply. Please ask for a personalised illustration.

Fixed rate

Allows you to fix your rate for a specified period of time.
Ideal for those who need to budget carefully and who need to know what they will be paying each month.
Terms are normally available for periods between 1-25 years.
Generally the shorter the term of the fixed rate, the lower the interest rate.
At the end of the fixed rate period, some lenders will offer an extended fixed rate, whilst others will revert to their standard variable rate.
Early redemption penalties may apply. Please ask for a personalised illustration.

Discounted rate

For an agreed fixed period, the lender will apply a discount off their standard variable rate.
Discounted mortgages will help to keep your payments lower for a period but will still fluctuate up or down if rates change.
Typically discounts are available from 1 – 5 years.
Generally, the shorter the discount period the larger the discount.
Your monthly payment may fluctuate in line with any changes in lenders standard variable rate.
Early redemption penalties may apply.

Flexible mortgage

May allow you to vary your payments within given parameters.
Payment holidays may also be a feature with some lenders.
Overpayments are also allowed, which can help to pay off your mortgage earlier and/or lower the monthly payments.

Cash back mortgage

You will receive a cash lump sum usually following completion of your mortgage.
This can be an agreed percentage of the amount that you borrowed, or a fixed amount.
You may have to pay back some or all of the cash on early repayment of the mortgage.

Tracker Mortgage

Your monthly payment may fluctuate in line with any changes in the base rate.
The lender agrees to link your rate payable to the Bank of England base rate.
This can either be in the form of a loading or of a discount for a set period.
The Bank of England review their base rate monthly, although the reviews do not necessarily result in a change of rate.
Early redemption penalties may apply.