With the UK discounted rate mortgage you are charged a discounted rate of interest for a certain period of time. You will be charged in tandem with the Bank of England base rate, but at a lowest mortgage rates, so the rate will vary with market changes. Discounted rate mortgages will apply for different periods of time according to the lender, but can vary between six months and five years.

However, you should perhaps expect to pay more in extraneous charges with this sort of deal. You will probably also be bound by certain conditions, such as agreeing to stick to the lender’s variable rate for a certain length of time after the discounted period has terminated. If this is the case then you will find that you will need to fork out for a substantial redemption penalty if you decide to change mortgage providers. Pay special attention to all the terms and conditions of a discount rate mortgage before you agree to anything.

Discounted mortgages offer, as with any mortgage deal, a mixture of pros and cons. They are often suited to first time buyers due to the low initial expenditure that they demand. It is possible to find discounted rate mortgages that do not bind the borrower indefinitely to the lender, and this way the shrewd homebuyer can skip from provider to provider, taking advantage of the low interest rates. It is possible to find discount rate mortgages that do not bind the borrower indefinitely to the lender, and this way the shrewd homebuyer can skip from provider to provider, taking advantage of the low interest rates. The disadvantage of a discount rate property mortgage is that it is often very difficult to leave one once you have signed up - it is crucial that you check this out if you are contemplating taking out a discounted mortgage UK.

• Variable rate
• Fixed rate
• Discount rate
• Capped rate