Mortgages
Which Mortgage Is For You?
There are several terms used to describe the interest rates you pay on a mortgage, and the key terms are as follows.
Standard Variable Rate (SVR)
The SVR is the lenders standard rate. With a variable rate mortgage, you are normally able to switch lenders at any time without being penalised. If you take out a mortgage that has a fixed, tracker or discounted rate once the set period of time ends the loan will usually revert to the Lenders SVR.
Fixed Rate
A fixed rate mortgage allows you to repay interest at a fixed rate, irrespective of any interest rate fluctuations. In other words, your monthly repayments will remain the same every month for a time period agreed between you and your lender.
Tracker
A tracker mortgages usually tracks any movement in an index specified by the lender, this for example could be the Bank of England Base Rate for a set period, so you will benefit from any falls in interest rates, but will also have to pay more each month should the rate increase.
Discount
The discount mortgage rate is another variation of the standard variable rate. It provides a discount from the lenders SVR for a set period of time. The variable interest rate still fluctuates, meaning your monthly repayments may differ slightly from month to month, but the discount remains constant.
Important Note
Fixed, Tracker and Discount rate mortgages often have early repayment charges so you need to be sure this is suitable for you for the foreseeable future. Furthermore, the lender may also charge a ‘booking/arrangement fee’ to apply for these types of mortgage. You should ask your adviser to explain these in more detail, or ask for an illustration.
As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments.
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As Financial Advisers, Acumen Associate Financial Services Ltd have access to a wide range of products and services available in the UK – as opposed to Restricted Advisers, who may only advise and offer products from the company they represent. This means that we are able to give you impartial financial advice and recommend the most appropriate products for you, so that you will enjoy choice, value for money and our high-quality service. Acumen Associate Financial Services Ltd are authorised to deal with many forms of financial services and specialise in giving advice to clients on a wide range of subjects to assist with your personal and corporate financial planning.
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Ynysddu
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CF72 9UA
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