| Planning to invest money but have heavy mortgage payments to give month after month? Discount rate mortgage is the right answer for you. If you are still confused, read further and feel free to get back to us as we offer a wide range of mortgages options for you.
Discount rate mortgage offer a certain percentage of discount for a specific period. This means that you could benefit from lower payments but by the end of the discounted term, your payments will go back to the standard rate.
We provide you with the best selection of discount rate mortgages and remortgage available with us.
Discount rate mortgage can last from six months to five years. Shorter the time period the higher the discount. During this tenure, if the ender's standard rate moves up and down, so the discounted rate moves up and down by the same amount, with the differential between the two remaining the same. Discount rate mortgage is helpful for those people who prefer to give low interest payments initially and larger payments later. It is generally those people who need money for some other purpose mainly for furnishing the house that opt for discount rate mortgage.
Another benefit of discount rate mortgage is that incase there is a fall in the Bank of England's base rate, it will lead to a subsequent fall in the lender's standard rate as well. However, there will be a need to pay an application fee while applying for discount rate mortgage. Also once the discounted payments are over, you will suddenly have to make higher payments. If you want to change your lender after the discount period, your lender will charge you a fee for it.
As we can see, there are a few advantages as well as disadvantages to discount rate mortgage. The decision for taking up the benefits highly depends on your circumstances. There could be a need for money which has to be invested elsewhere. In such a case, taking discount rate mortgage is the best option. Just be careful to make all your payments on time to create a strong history for yourself which will benefit you later. |
