With the sheer amount of mortgage options out there, it can be challenging to find the one that fits your needs. For competent and impartial advice, you need the help of industry experts like us here at Mortgage & Lifetime Solutions.
Our team has over 25 years of experience navigating the mortgage sector. During that time, we’ve helped a lot of clients find the best mortgage deals for them. One of the most popular solutions, particularly in South London, is discount mortgage deals.
Learn more about this type of mortgage and whether it’s the right one for your needs.
How Discount Mortgages Work
Discount mortgages are just like any other variable interest mortgages in that their monthly payments may change from one month to the next.
However, where they differ is where their interest rates are based on. Unlike other variable interest mortgages, discount mortgages are not based on the base rates set by the Bank of England. Instead, discount mortgage interest rates are based on the standard variable rate or SVR of the lenders themselves. Lenders may choose to lower or raise their SVRs at any time.
Discount mortgages get their name because the loan’s interest rate is most likely discounted from the lender’s SVR by 2%. If they set their SVR at 3%, for example, the interest rate of their discount mortgages would likely be set at 1%.