|
"The Easy Way to Get Your Best UK Mortgage" |
|
| Helping
over 300,000 people a year find the right mortgage NINE YEARS ONLINE |
|
|
|
|
||||||
|
|
The easiest way to think about variable interest rate mortgages (often described as Standard Variable Rate mortgages) is like this:
•
Mortgage lenders have to borrow the money they lend you
• Their profit comes from charging you more interest than
they are paying
• When the interest rate your lender is paying goes up,
they pass on the same increase to you. This keeps their profit
margin the same.
For example, if your building society is charged 5 per cent interest on the money they borrow and they want to make 2 per cent profit, they will give you an interest rate of 7 per cent.
If the interest rate your lender pays is increased to 5.5 per cent, then they will increase your interest rate to 7.5 per cent. This keeps their profit the same, but costs you more.
Of course, it can work in your favour. If the interest rate your lender is being charged falls, then they will reduce your interest rate too, reducing your monthly payments.
Variable rate mortgages can be good, but you should always be aware that there is potentially no restriction on how much your monthly payments can be increased. If interest rates go up, so will your payments – usually immediately.
If you are not sure if this is the best option for you, consider a fixed rate, discounted or capped rate mortgage – click on the links for more details on how these mortgages work.
Read Why you should never pay a standard variable rate.
To read more on this subject please see the list below or your mortgage guide or your home buying guide
Read enough? Just want a quote? To get your best mortgage quote quickly and easily we can put you in contact with a recommended mortgage adviser. It's free, completely confidential and there's no obligation at all. Simply fill out the form below
Fixed
Rate
Variable Rate
Capped Rate
Discounted Rate
Interest
only mortgages
Interest repayment
arrangements
Choosing
a Mortgage
Different Mortgage Types
Re
Mortgages
How to Find your Mortgage
Mortgages in Principle
Guide to Buying Home in the UK
Guide to UK Home and Mortgage Insurance
Back to A to Z Mortgages UK List
Read more about Types of Mortgages
See contents of Full Mortgages Guide
See contents of Home Buyers Guide
I've read enough for now and want to get a free Quick Mortgage Quote
The
two major varieties:
Repayment
mortgages
Interest
only mortgages
Then
mix in the various:
Interest
repayment arrangements
Finally,
to cover all the different types there's a
Complete
A-Z of mortgages
All UK Mortgage types
100%
Mortgages
Base
Rate Trackers
Bridging
Loans
Bad
Credit Mortgages
Buy to Let
Calculators
for Mortgages
Cashback
Mortgages
Capped
Rate
Costs
of a Mortgage
Current
Account Mortgages
Discounted
Variable Rates
Equity
Release Mortgages
Endowment
Mortgages
Expatriate Mortgages
First
Time Buyer Mortgages
Fixed
Rate Mortgages
Group
Mortgages UK
Interest
Only Mortgages
Investment Mortgages
ISA
Mortgages - UK
Part
and Part Mortgages
Pension
Mortgages
Prime
Mortgages
Repayment
mortgages
Shared
Ownership Mortgages
Standard
Variable rate
| Can't Find It Here? Enter what you are looking for in the box below |
I'm
employed - shortcut
I'm self-employed
- shortcut
I'm
buying my first mortgage -
shortcut
I've
got a bad credit history -
shortcut
Mortgage
Basics
How
to Choose your Mortgage
Types of Mortgage
Where to Find Your Mortgage
Getting a Mortgage in Principle
Browse over 200 Free Mortgage TipsYour Complete Guide to UK Mortgages Find Out How to Win the Race to Buy Your Home - Home Buyers Guide Learn How to Save ££s by Remortgaging Read the Insider Info on Home Insurance Site Help |