10 Gotcha’s When Getting a Mortgage Part 2 >

2.  Types of interest rates. 

·      Standard Variable rate is when payments go up or down with the mortgage rate changes.  Standard Value Rate can be a sensible choice if payments made can include more than the minimum monthly payments (after rate increase).

This type of rate is beneficial when one can afford to pay more when interest rates go up and like the flexibility to be able to make overpayments without penalty (assuming there are no restrictions on making such payments and no early repayment charges apply).  Standard variable rate does not suite those who can not afford to pay the increased payments.

·      A “tracker” (changes in line with specified rate) rate is a variable rate loan where the interest rate is set amount above or below the Bank or some other base rate and so always “tracks” changes in that rate.  It suites those who can afford to pay more when interest rates go up and want to be sure that falls in interest rates are passed on to you in full.  It is not for people who would be unable to afford the increased payments. 

Back > | Next >




Get a FREE quote TODAY! Click here!