Types of Mortgage
Before choosing any mortgage it is important to see what types are available and what they actually mean. We will also explain the advantages and disadvantages of each type where possible.

If you have any further questions, please feel free to email us

Variable Rate
Variable rate is a rate that moves in line with the lenders prevailing standard variable rate.

Advantages			Disadvantages
	Usually no application, arrangement or redemption fees.			Your repayments will rise with interest rates.
	Your monthly repayments will fall with reductions in interest rates.			Does not give you ability to budget for repayments.
	Gives you flexibility

Capped
A capped or ceiling rate is a limit above which the interest will not exceed.
E.g. 5% for two years capped. Rate can fall below 5% but not rise above.

Advantages			Disadvantages
	Gives you a guaranteed rate which repayments cannot exceed.			Usually the Capped rate is higher than a fixed rate because repayments can fall with interest rates.
	If interest rates fall your repayments will reduce with them.			Usually have to pay application and/or arrangement fees.
				If the loan is redeemed during the capped period and in some cases for a short while after, a penalty fee of several months repayments is normally payable.

Discount
Where a rate is guaranteed to be a fixed percentage below the standard variable rate for a set period.

E.g. 2% discount for 2 years. The interest payable during the first 2 years will be 2% below the standard rate.

Advantages			Disadvantages
	Gives a reduced repayment over the period of the discount.			Repayments will rise with interest rates.
	Repayments will reduce with interest rate falls.			May have to pay application and/or arrangement fees.
				Usually a penalty payment of several months interest if redeemed during or shortly after discounted period.

Capital Raising
A remortgage usually involves the changing of lenders for the client. Clients normally re-mortgage for the benefit of :-