Discount Mortgage

A discount mortgage as the term implies is where a “discount” is applied the standard variable rate. This option is available for the first few years of the Mortgage after which the terms shift to the normal variable rates.

The discount rates are inversely proportionate to the loan term. The shorter the loan term the higher the discount offered. This mortgage type offers you the lowest available rates in the mortgage. However the rates keep fluctuating with the standard variable rates.

Advantages of Discount Mortgage

• A discounted rate in the earlier years of the mortgage, so offers you the convenience of investing in home accessories for the home you have just shifted to
• Your interest costs reduce further with the fall in Standard Variable Rates
• Early redemption payments are not charged for early payments before they are due

Disadvantages of Discount Mortgage

• As compared to a fixed rate mortgage this option offers a lower flexibility
• Required application fee charged during arrangements for a Discount Mortgage deal