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Discount Rate Mortgages


What is a discount rate mortgage?

A discount mortgage is an example of a variable rate mortgage, it offers a discount on a certain interest rate, normally a lender’s Standard Variable Rate (SVR). There are different types of discounted mortgages. A lifetime discounted rate covers the entire mortgage term, but more commonly discounted products can be purchased for a two to five year term.

Is a fixed rate mortgage right for you?

Is a discount rate mortgage right for you – review the advantages and disadvantages below.

For a personalised recommendation call our St Albans mortgage advisers today on 01727 845500.

Advantages with discount rate mortgages

  • Lower interest rate in the discounted period as your rate will always remain below your lender’s SVR
  • In periods when SVR’s are generally low your interest payments will be lower with a discounted rate mortgage.

Book a consultation

Save time and call our Lonsdale mortgage broker on 01727 845500 for an initial no obligation mortgage review. Complete our mortgage enquiry form and get the right mortgage for your situation.

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Disadvantages with discount rate mortgages

  • You may pay an application fee to arrange a discounted mortgage and could face early repayment charges if you pull out of a discounted mortgage deal early.
  • If your lender’s SVR increases the interest rate you pay on your mortgage will increase, unlike a fixed rate mortgage you cannot guarantee what you will pay each month.
  • If you have a discounted mortgage rate that is well below your lender’s SVR you may face a sudden increase in your mortgage costs when the discounted rate period ends.

Thanks once again for all your support and advice in securing our mortgage. You provided an excellent service and we will certainly use you again.”

Mr C, St Albans, Hertfordshire