Standard Variable Rate

This can vary from one lender to another and is the rate that most borrowers pay. It will rise and fall, broadly, in line with the changes to the Bank of England Base Rate. As a new borrower (whether purchasing or re-mortgaging), you can normally achieve a rate lower than the Standard Variable Rate but it is important to know what your payments would be at this rate because you may revert to it once your chosen deal draws to an end.

Fixed Rate

This option will set the rate for a specific period of time (most commonly between 2 and 5 years). Your payments will stay the same for this period despite what changed may occur to the lenders Standard Variable Rate.

Advantages

Disadvantages

Capped Rate

A variation of the Fixed Rate scheme. The rate can not go up but can go down if the lenders Standard Variable Rate falls below the level of the Capped Rate. This type of deal is more prevalent in a high interest-rate market place when the general feeling is that rates should fall. In this situation, borrowers are often concerned that mortgages are quite expensive. They are therefore naturally drawn towards the idea of fixing to avoid future increases jeopardising their financial security but would also like to benefit from the likely reduction in rates that could follow in the years to come. Capped rates therefore offer the perfect solution.

Advantages

Disadvantages

Discount

This option will give you a reduction against the Standard Variable Rate for a specific period of time. For example, if you were to obtain a 2% discount for 2 years and the lender had a Standard Variable Rate of 6.5%, your initial payments would be calculated against an interest rate of 4.5%. If the Standard Variable Rate reduced to 5% you would fall in line to 3%.

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Disadvantages

Tracker

This is a variation of a discount and works in exactly the same way except that the payment rate is following something other than the lenders Standard Variable Rate (usually the Bank of England Base Rate).

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Disadvantages

Flexible Mortgages

Flexibility is a concept rather than a specific mortgage type. It is possible to have a fixed rate that is flexible or a discount that is flexible. There is no defined standard of what makes a mortgage product flexible. However, when seeking a flexible deal we would advise that you look for the following features.

Advantages

Disadvantages

When helping you to choose what type of mortgage is best suited to your needs it is reassuring to know that we utilise software systems that can access over 3,000 different schemes! This market leading technology, coupled with our understanding of the industry and its products, ensures that we provide the advice most appropriate to your individual circumstances and requirements.

There are other factors to be taken into consideration when choosing a suitable deal which include:

Premier Financial Services will cover each step thoroughly with you so that you fully understand the options and are able to select the package most suitable to your needs. Contact our friendly staff today on 0118 9796687 for more advice.

“Paul assisted us with sorting out our mortgage when buying our current house and also arranging life & other insurance. He was dedicated in following our applications through to a successful end result in both cases.

- Geraldene Dobson - Owner, Hemisphere Accounting Ltd -

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