Mortgage Rates
Mortgage interest rate is the most important element of your mortgage deal. The interest rate determines how much interest you will have to pay back over term of the mortgage. We have combined a guide below for a different mortgage rate available in the market.
Capped Rates
A capped rate mortgage helps you plan your budget more effectively. The interest rate cannot rise above an agreed ceiling limit. When interest rates come down however, the borrower benefit because monthly payments are reduced although there may also be an agreed floor level. This makes it particularly attractive if interest rates look like they are quite volatile over the period. The capped rate is for a particular period of the mortgage term. At the end of the capped rate period the mortgage rates revert back to the appropriate variable rate.
Cashback Mortgage
A cashback mortgage provides a lump sum back once the purchase is completed. This can either be in the form of a set amount or a percentage of the amount that is borrowed (typically two to five per cent). The cash back is refundable if the mortgage is settled before a particular period set by the lender.
Flexible Mortgage
Flexible mortgages were developed to cope with the borrower’s lifestyle or drastic changes that can occur in a borrower's financial situation (for example, hob loss through redundancy). Sometimes are also known as 'open plan' or 'freedom mortgages'.
Few of their features are as follows:
- Lump sum payments towards the mortgage
- Payment holidays
- Monthly overpayments
- Allowance of withdrawal of a pre-agreed further advance
- Reducing or stop making payments during difficult financial situation
Current Account Mortgages
Current account mortgages combine the current account with your mortgage. These are designed to pay off your mortgage quicker. The advantage is that when interest is calculated on the sum borrowed, the funds in the current account are taken off the mortgage.