If you need to save money in the first few years of your mortgage then a discount rate could be the way to go.
Discounted rate mortgages give exactly what they say a discount on the lender's Standard Variable Rate (SVR) Mortgage. For example, a mortgage lender may offer a 2% discount on its SVR mortgage for two years. With an SVR of 6%, this would make your mortgage rate 4%.

Advantages of Discount Rates 

• The interest rate you pay is set below the SVR for a specific period - this can save you thousands of pounds.
• If interest rates drop because your payments will follow suit and you could end up saving money on your mortgage.

Disadvantages of Discount Rates

• The variable rate is linked to market conditions - this means that if the Bank of England puts the interest rate up - it's likely your SVR will also go up.
• Your lender is not obliged to give you the full benefit of the Base Rate falling. Your lender will decide how much they will reduce your mortgage payments.

For further assistance, call us on 0800 612 7688.