Interest Rates
According to recent estimates over 60% of mortgage holders are repaying interest at their lenders Standard Variable Rate (SVR). This is usually the lenders most expensive option. By remortgaging borrowers can switch to a lower interest rate and enjoy significant savings – an average of around £400 a year. There are many types of mortgage and remortgage deals available, however they can be broken down into four main types:
Fixed Rate: The interest rate is set at a fixed rate for a specified amount of time. Regardless of what happens to the Bank of England base rate, a fixed interest rate will remain constant for a specified period – meaning your payments will be constant.
Capped Rate : The amount of interest you pay will fluctuate inline with your lenders current rate allowing you to benefit from any cuts in interest rate, but your monthly repayments will not rise above an agreed capped level.
Discounted Rate : The interest rate you pay will vary in accordance with your lenders SVR, but at a percentage discount. For example with a discount rate of 2%, if your lenders SVR is set at 5% you will be charged a monthly interest rate of 3%.
Flexible : Suitable for those with a varying income, a flexible mortgage allows borrowers to either pay off lump sums, reducing the mortgage term or under pay.
At the end of these deals, which usually last from 2 to 5 years, the interest rate will revert to the lenders SVR. If you have come to the end of one of these offers, you might well be able to remortgage again and take advantage of other special offers with low interest rates.
Contact us to get the best rates for bridging loans.
