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Cheap Mortgage
Be careful when you are researching the
best mortgage deal. Most mortgage lenders have special offers to attract new borrowers. However, what looks like a great deal may not turn out to be so several years down the line. You may be offered a low interest rate (APR) for a set period such as one, two or three years but then be forced to borrow later at the lender's high standard variable rate.
Cheap mortgage deals are out there but look very hard before you leap!
If you are looking for a low cost mortgage deal you must research the various types of interest rate deals available to choose the one that best suits you:
Standard variable rate Your payments move up or down with the lender's own mortgage rate, which is usually driven by the Bank of England's base rate.
Usually you can leave your lender without any penalties or problems.
You're in control. You can usually pay back extra amounts (and cut your interest costs) without a penalty. The standard variable rate moves with interest rates. So if interest rates go up, so will your monthly payment. It will almost certainly be expensive compared to other deals. The lender may not reduce, or may delay reducing, their variable rate even if the Bank of England rate goes down. Tracker rate A variable rate loan with an interest rate that's at a set amount above or below the Bank of England or some other base rate, set independently from the lender.
It tracks (moves up or down with) that rate.
It can pay to go for a tracker if you can afford to pay more when interest rates go up, in exchange for benefiting when they go down.
It's not a good choice if your budget won't stretch to higher monthly payments. Discounted interest rate Your monthly payments can go up or down, but you get a discount on the lender's standard variable rate for a set period of time.
At the end of the deal, you usually change over to the standard variable rate.
It gives you a gentler start to your mortgage, at a time when money may well be tight.
You must be confident you can afford the payments when the discount ends.
The discount period is limited, so don't get used to those early low repayments. You may not be able to make overpayments and pay off the loan early without penalties The lender may not reduce, or may delay reducing their variable rate even if the Bank of England rate goes down. Fixed interest rate Your payments are set at a certain level for an agreed period. At the end of that period, they'll usually switch you to the standard variable rate.
You have the security of knowing that you can afford your payments and will make it easier for you to budget. If rates go down, you won't benefit. Your payments will stay at the higher rate. You may not be able to make overpayments and pay off the loan early without penalties. Capped rate Your payments are variable and often linked to a base rate, but fixed not to go above a set level (the 'ceiling' or 'cap') during the period of the deal.
At the end of the period, you are usually charged the lender's standard variable rate.
Useful if you want the security of knowing that your payments can't rise above the set level, but still benefit if rates fall. Collared rate May be used in conjunction with a capped rate and/or a tracker.
Your payments are variable but will not fall below a set level (the 'collar'). Note that if the rate payable is only just above the 'collar' and you think rates will fall, you may not get the full benefit of a reduced payment.
Burtplan Personal Finance
Applying for
loans, mortgages and
remortgages could not be easier: Burtplan Personal Finance have a no hassle promise and will help you take control of your
Personal Finances today!
As a major
UK loan broker we only get paid if we get your loan paid out. Therefore we do everything we can to get your loan paid out as
quickly as possible at the
best loan interest rates and
monthly repayments to suit your circumstances.
Apply for a personal secured loan or homeowner loan quotation.
Burtplan Personal Finance will
compare secured loans, personal loans and remortgages to suit your circumstances while achieving the
lowest interest rates available from the leading UK Personal Finance Lenders. We also offer
business and commercial mortgages. Apply here for a
commercial mortgage. Apply here for a
unsecured personal loan.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
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