Mortgage Interest Rates 
                     
    There are numerous lenders and different types of mortgages in the market place. When you discard the packaging and incentives, they are all based on either an interest rate that is fixed and will not change for a set period or an interest rate that is variable and will fluctuate according to the economic climate.

Fixed rate mortgage

A fixed rate mortgage is what it says, no matter what happens to interest rates in general, your monthly mortgage payments will stay the same for an agreed period, usually between two and five years. At the end of the fixed period your mortgage will change to the lenders prevailing variable rate.

Variable rate mortgage

Based on the lenders' SVR, the monthly repayments of this mortgage are likley to be up or down in line with fluctuations in the Bank of England base rate. Experience shows when the base rate moves up lenders' will usually increase monthly repayments, but do not always lower them when the base rate moves down.

Tracker mortgage

Similar to variable mortgage, but the interest rate on your mortgage will usually be 1.5% to 3% above the Bank of England base rate. When the base rate moves up or down, you are guaranteed that this is reflected in your mortgage rate; your monthly repayments will increase or decrease accordingly

Capped rate mortgage

At the outset of a capped mortgage, the rate you pay will be the lenders' current variable interest rate. This is guaranteed not to rise above a pre-set ceiling, or cap, for an agreed period of time. If during this period interest rates fall then your rate being variable can come down. At the end of the capped period your lenders' prevailing variable rate will apply.

Cap and collar mortgage

This works exactly as the capped rate mortgage, but if your lenders' variable rate falls there is a floor, or collar below which your rate will not go. At the end of the agreed period your lenders prevailing variable rate will apply.

Discount mortgage

This type of mortgage offers a discount on the lenders' variable mortgage rate for a set period of time. The reduction in monthly payments during the discount period is designed to help with the cost of moving. At the end of the discount period your monthly repayments will increase, the interest rate will revert to the lenders' prevailing variable rate.

Cashback mortgages

Similar to a discount mortgage, except the amount of money you would have received in the form of a discount from your monthly payments over a given period of time, is converted to a single lump sum. This is usually paid to you on completion of the mortgage and is a practical contribution to the cost of moving.

Flexible mortgages

Relatively new to the UK market; designed to take account of borrower's changing personal circumstances. Features include being able to under/overpay (without penalty), enjoy payment holidays and be able, subject to conditions, borrow additional money against your property.		  
Think carefully before securing other debts against your home.
Your home may be repossessed if you do not keep up repayments on your mortgage.		  
 
Capital Solutions are introducers to The Property Specialists Limited who are appointed representatives of Ingard Financial Limited who are
Authorised and Regulated by the Financial Services Authority 450731. Think carefully before securing other debts against your home.
Your home may be repossessed if you do not keep up repayments on your mortgage.

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