Mortgage rate types

The long and winding road that leads to your dream home becomes even more complex here.

Standard variable rate/Reversion rate

• Rate is the ‘default’ rate set by the lender.
• Generally no arrangement fee payable.
• Generally no early repayment charge.
• Rate is set by lender and can move up or down.

Discounted variable rate

• An incentivised rate to provide lower payments in the early years.
• Linked to lender’s standard variable rate.
• Discount for set period, eg two, three or five years.
• May be an arrangement fee.
• May be early repayment charges.
• Rate is variable and so can move up or down.

Tracker rate

• Generally linked to the Bank of England base rate.
• May track for a set period eg two, three or five years or for whole mortgage term.
• May be an arrangement fee.
• May be early repayment charges.
• Rate is variable so can move up or down.

Fixed rate

• Rate is fixed for set period typically two, three, five or ten years.
• Payment stability during fixed rate period.
• Generally an arrangement fee payable.
• Generally early repayment charges.
• No benefit from drop in interest rates.

If you’d like advice on mortgages and protection contact Sara Reed on 01983 535740 or email sara.reed@rouseltd.co.uk.