mortgage at 5

mortgage at 5
In this article I will explain the different types of mortgage products that are available on the mortgage market, hopefully after reading this article you will have a better understanding of mortgages, and the products are available, and thus the possibility to choose which is best suited for your situation.

Firstly, I am going to talk about variable mortgages. There are four different types of variable mortgages, they are standard variable rate, discounted, cash back, and Tracker. Although all these products are slightly different they are all different, which means they can be up or down.

A standard variable mortgage is the most frequently heard mortgage product, the interest rate varies during the period covered by the influences of things, like the Bank of England base rate, competitors' prices, and the current bank base rate of interest.

A discounted product is related to the standard variable rate, but also offers a discount for a specified period, ie two years, but some of these deals with the heavy early repayment penalties if you do not want the mortgage, if you are nor in the discounted period.

Cashback mortgages offer an incentive on a percentage of loans that a lump sum at the beginning of the mortgage, ie 3%, but early repayment are generally applicable to these types of mortgages, and the money back may have to be repaid when the term is valid.

Finally, Tracker mortgages, these mortgages as interest rate movements in the London Inter Bank Offered Rates (LIBOR). The tracker can be used only for a specified period and the early repayment of these may accompany.

The next type of mortgage is a fixed rate mortgage. A fixed rate mortgage offers a guaranteed interest rate charged for a certain period, ie three years. For most of the early repayment rates and administrative fees are charged when you no longer want the mortgage before the end of the period.

A lump sum may be what is, and Collared limited, although it is technically not entirely fixed rate of interest payable can not exceed a certain level (the cap) or below a certain rate (the collar). You can also mortgage, the limited, but not Collared, which means that the interest rate payable can not exceed a certain level, but can decrease indefinitely.

The last type of product I to talk about is flexible products, the main types are; offset / current account, Accrued Interest and CAT standard mortgages. An offset / current account mortgage is when the borrower has all the mortgage, saving a current account into one, the idea is that it allows mortgage borrowers to offset any surplus funds to the repayment of the mortgage and make it faster.

Accrued interest mortgage borrowers to pay only a portion of the monthly repayment of interest for a specified period. This means that the borrower has in the short term, the payments reduced, but increased the payments in the later years of their mortgage.

CAT standard mortgages; CAT stands for cost, access and conditions. This means that the mortgage, the minimum standards set by HM Treasury. There are different standards depending on the product type, ie fixed or variable.

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