Mortgage Lifetime & Solutions provides discount mortgage solutions to Bromley homebuyers. We offer sound advice and recommendation to help you achieve your homeownership goals. Our professional mortgage advisor knows the ins and outs of the mortgage sector, including valuable information on discount mortgages.
Defining a Discount Mortgage
This is a type of variable-interest mortgage where the rate is at a fixed amount and below the standard variable rate (SVR) set by the lender. The term period may be for the life of the mortgage (usually 25 years) or a set period (either two or five years). Since the rates can vary, you can expect your mortgage payments to be different from month to month.
How This Loan Works
When paying your mortgage, your money goes to paying your principal along with the interest charges from your lender. Any savings you make from this type of loan applies only to the interest you pay.
Here’s an example: If a mortgage lender sets an SVR of 7% and the discount is 2%, you’ll pay an interest rate of 5%. When your lender decides to increase the SVR to 8%, your discounted rate will also increase (in this case, it’s 6%).