This mortgage allows you to repay part of the amount you borrowed, along with the monthly interest charge. Your mortgage payment is mostly interest in the beginning, but as your mortgage term progresses, you increasingly pay off the amount you borrowed.
Your payments with this mortgage will be lower, however, your payment will only cover the interest on your loan, which means you’ll still owe what you borrowed at the end of your mortgage term. You’ll need credible arrangements to pay off the mortgage, such as an Individual Savings Account (ISA), to avoid having to sell the property when the mortgage term ends.
Exclusive Mortgage Deals
At Carrington, we’re often party to exclusive deals for our customers that aren’t available everywhere. Our expert mortgage advisers have further information that can help you find the right mortgage to suit your needs.
Standard Variable Rates (SVR)
Your payments under a Standard Variable Rate mortgage should rise and fall along with the Bank of England bank rate changes, however, they may not change at the same time, or by the same amount.
With this mortgage, you can count on your payments staying the same throughout a set period of time – usually a two, three or five-year term.
Tracker Variable Rates
These are usually linked to the Bank of England, which means they will change along with the bank rate.
This type of mortgage allows you to know the maximum you will pay for a set period of time. You’ll have the option of knowing the maximum monthly repayments you would make during a set period, which is usually two or three years.
Discount Variable Rates
Here, you’ll benefit from a discount on the lender’s standard variable rate. If the lender’s standard variable rate (SVR) increases or decreases, so does the discounted rate. Typically, the shorter the discounted period, the larger the discount.
Your mortgage tends to be linked to a current account or savings account. With this mortgage, the amount in these accounts is then offset against your outstanding mortgage. However, you’re unlikely to earn interest on your savings, which are offset.
Flexible mortgages allow you to vary your monthly payments, and in some cases, take payment holidays. This can help you reduce your mortgage with lump sum payments without incurring an early repayment charge.