Discounted interest rate

How Does It Work?

Your monthly payments can go up or down, but you get a discount on the lender’s standard variable rate for a set period of time. At the end of the deal, you usually change over to the full standard variable rate.

Early Repayment Charges?

During the special deal: yes, almost always. They can apply even after the end of the special deal period as well.

What does it mean for you?

  • It gives you a gentler start to your mortgage, at a time when money may well be tight. But you must be confident you can afford the payments when the discount ends.
  • The discount period is limited, so budget for higher repayments.
  • You may not be able to make overpayments and pay off the loan early without penalties.
  • If the lender decides to increase the rate your monthly payments will increase.
  • If the Bank of England rate goes up, your lender may decide to increase your rate. They will choose when and how much to increase your rate.