Mortgages

A discounted mortgage is a home loan where the interest rate is pegged at a set amount below the lender’s standard variable rate for a set period.  It is a variable-rate mortgage, meaning the amount you pay could change from month to month.

The interest rate applied to the mortgage repayment is linked directly to the Bank of England’s base rate and will rise and fall in line with that rate.

Where a mortgage borrower also has savings, by giving up the interest on those savings he or she can reduce the amount of interest they pay on their mortgage debt.

The monthly mortgage repayments are based on the prevailing rates of interest the lender charges - not the Bank of England (BoE) base rate. In other words, it is entirely the lender’s decision on the rate of interest they charge the borrower.

A mortgage that pays a lump sum cash rebate of a fixed amount of money, or a percentage of the actual loan, on completion of the mortgage or shortly after.