Products


Being conversant with the ever increasing variations in mortgage products available nowadays, they are able to use their expertise to locate the most suitable mortgage for you. In so doing, not only seeking the most attractive rates of interest, but also reducing the worry and inconvenience involved in seeking a loan.

They will provide details of products that may be of interest to you and then discuss the options with you, until a specific mortgage is selected. At that time a detailed illustration of mortgage costs will be provided.

Variable Homeloan Base Rate
This is the "standard” rate of the lender, which is variable and very much dependant upon the economic conditions prevailing at any one time. It does not offer any protection against increases in rates.

Discount
This is a discount from the variable homeloan base rate set by each individual lender. This discount will apply for a set period of time, usually for two, three or five years. May or may not have Early Repayment Charges (ERC).

Fixed Rate
The rate is determined on application. Usually fixed for two, three, five or ten years. The rate will not vary during the fixed period, therefore providing the comfort of a known monthly commitment. Invariably these products are subject to ERC and indeed some of the exceptionally low rates incur ERC well beyond the end of the fixed rate period . On expiry of fixed rate term the loan normally moves onto the variable homeloan base rate.

Capped
Similar to fixed rates but with the advantage of the rate reducing if the lender’s variable homeloan base rate falls below the pre-determined capped rate, e.g. Rate capped at 7%. As long as the variable homeloan base rate is above that figure, then 7% payable. If the variable homeloan base rate falls below 7% the rate charged will follow it down.

Capped rates are usually set at a premium over a comparable fixed rate option and invariably set at a level where the cap is unlikely to be triggered. At the end of the capped period variable homeloan base rate is payable.

Base Rate Tracker
These products are linked to Bank of England Base Rate. Usually your rate will be set at an amount above or below the Bank of England Base Rate. As with the discount, this is for a set period of time and again may, or may not have ERC.

Flexible Mortgages
Enables monies to be repaid and re-borrowed. Rate normally lower than variable homeloan base rate, but normally less attractive than fixed or discounted products. Only attractive if all flexible features are used.

Cashback
Rate is usually variable homeloan base rate, with the lender providing a cash gift – normally 3% - 7% of the loan. ERC will apply - often for as long as five years. This is in effect a discount paid up front.

Daily Interest Calculation

Some lenders calculate interest on the balance outstanding as at the 31 December each year, meaning the capital element of the monthly repayment remains dormant until that date. With Daily interest calculation, the capital element of the monthly payment is applied to the debt immediately, so the amount of interest payable the following month is based upon a slightly lower balance. This produces a saving on interest charged.

With Monthly interest calculation, the capital element of the monthly payment is applied to the debt immediately, but the interest payable is only recalculated once a month. If this recalculation is the same day as the day the monthly payment is applied, it is in affect the same as a daily calculation. This also produces a saving on interest charged.

While a daily or monthly calculation method works to your advantage on a capital & interest mortgage, obviously, it has no benefit on an “interest only” mortgage.

Virtually all lenders will immediately apply capital lump sums to the account, subject to a minimum amount, normally £500 - £1000, so it is only the capital element in the normal monthly repayment that will benefit form daily or monthly charging.

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