Interest Rate Types

Again, with interest rate types, there are really only two different types - Variable and Fixed. We have listed some of the most common types of interest rate deal that you may come across.

 - Standard Variable Rate- Fixed Rates - Capped Rates - Discounted Rates - 
 Base Rate Tracker - Flexible Mortgages - Offset Mortgages - Cash Back Mortgages -
 

Standard Variable Rate (SVR)

The mortgage lender's normal mortgage rate. This rises and falls in line with general interest rates. However, when the rate changes and by how much is at the discretion of the lender. There usually aren't any Early Repayment Charges.
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Fixed Rates

 The Interest Rate is fixed for a set period: the shorter the time, the lower the rate will usually be. This offers you the ability to budget as you know exactly what you'll be paying each month and the security of knowing that you are protected against any interest rate rises. You will normally be charged an Early Repayment Charge for switching your mortgage lender during the fixed rate period, however, by the time your fixed rate comes to an end, you are normally free to switch lender without paying an early repayment charge, therefore avoiding having to pay the lender's SVR.
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Capped Rates

The Interest Rate is variable but guaranteed not to exceed a certain level ( the cap) but may fall in line with the S.V.R. This means that you know the maximum amount you will pay during the capped rate period, but that you may still benefit from any fall in interest rates. You will normally be charged an Early Repayment Charge for switching your mortgage lender during the capped rate period, however, by the time your capped rate comes to an end, you are normally free to switch lender without paying an early repayment charge, therefore avoiding having to pay the lender's SVR.
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Discounted Rates

You get a discount off the lender's SVR for a set period which may represent a valuable saving. However, your repayments will still be variable so you don't get the security that you get with a fixed or capped rate. You will normally be charged an Early Repayment Charge for switching your mortgage lender during the discounted rate period, however, by the time your discounted rate comes to an end, you are normally free to switch lender without paying an early repayment charge, therefore avoiding having to pay the lender's SVR.
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Base Rate Tracker

A variable interest rate mortgage that follows the 'Bank of England Base Rate' rather than the lenders own Standard Variable Rate. These were introduced after some criticism that lenders did not pass on all rate reductions to their borrowers. There are many deals that have no early repayment charges, however, you may still be tied into the lender  for as long as they give you an 'incentive rate'.
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Mortgage Account Options

Flexible Mortgages

Designed to offer the ability to over pay by a lump sum or additional amounts each month. Interest is charged on a daily basis, therefore full benefit is given immediately for any extra payments. There is usually the ability to pay a lower monthly payment or miss payments completely for a period of time. An additional sum can be available to borrow at a later stage (often without any formal application), this is called a "Drawdown Facility". This can be particular useful for self-employed individuals or for any unexpected expenditure. Find out what effect paying extra towards your mortgage may have using our Flexible Mortgage Calculator.
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Offset  Mortgages

These usually offer the same benefits as a flexible mortgage. Additionally, any positive balance on a current account or savings account held with the same bank or building society is "offset" against the mortgage debt; thereby reducing the amount of interest you pay on your mortgage and/or increasing the amount of interest you 'receive' on your savings.
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Cash back Mortgages

The Lender offers a cash lump sum on completion of the mortgage as an incentive. The larger cash backs are available on the S.V.R. Smaller cash backs may be combined with other incentives. You will normally be charged an Early Repayment Charge for switching your mortgage lender for up to 5 years after your mortgage completes.
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Your home may be repossessed if you do not keep up repayments on your mortgage.

You can choose how we are paid: pay a fee, usually 0.5% of the loan amount; or we can accept commission from the lender.

The FSA do not regulate some forms of mortgage.