Discounted Rate Remortgages
A Discounted Rate Remortgage ensures that you will pay a set amount below a lender's standard variable rate for a specified period of time. Whilst the standard variable rate fluctuates. The discount applied will remain fixed, for an agreed term. This is in effect a form of sweetener to the remortgage applicant.
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Discounted mortgages are often recommended to those who are keen to keep their initial payments as low as possible.
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Ideal for a first time buyer mortgage or someone whose income isn't particularly high and may wish to have some spare cash, for decoration, home improvements, or furnishings.
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Discount Remortgages can last from six month up to about five years. The shorter the period of the discount, the greater the discounted rate.
Discounted Remortgage Redemption Penalties
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One should always find about potential redemption penalties after the discounted period has ended.
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It may benefit you to wait until the end of the discount period then move to another discounted mortgage.
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If you do nothing after the pre-determined discount period, you will go back to the standard variable rate.
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Discounted rate remortgages are effectively enabling you to buy the same product but at a discounted price.
Advantages of Discounted Rate Remortgages
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The capital saved from the discounted rate can be used for other purposes.
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The discounted rates enable a small period of respite from the normal repayments
Disadvantages of Discounted Rate Remortgages
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The discounted rate will not typically last for the term of the mortgage.
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Once the discounted rate ends, the debtor will have to climatise to the new repayments.