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Financial Services > Mortgages > Discount Variable Rate Mortgages > Discount Variable Rate Mortgages
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A Guide to Discount Variable Rate Mortgage Loans

Discounted variable rate mortgages are loan set at an interest rate discount on a lender's standard variable rate. Typically, discount variable rate mortgages are set for a certain time period, after which interest rates return to the lender's standard variable rate.

How do discount variable rate mortgage loans work?

Discount variable rate mortgages are typically offered at a rate set by the lender. This rate will be a percentage lower than the standard variable rate offered by the lender. Over time, as the standard variable rate increases and decreases, the discounted rate also moves up or down by the same amount.

How long do discounted variable rate mortgages last for?

Generally, discounted variable rate mortgages are offered for a fixed period of time. This is usually two years, but mortgage lenders also offer discounted variable rate mortgages as three or five year deals.

What should I look for in a discounted variable rate mortgage?

Experts advise borrowers looking for cheap discounted rate mortgages that they should look for loans without an extended redemption penalty period. This is known as a 'tie-in', and prevents borrowers from switching their mortgage loan without being charges an early repayment penalty. This type of loan could tie you into paying a lender's standard variable rate for several years.

What are the advantages and disadvantages of a discounted variable rate mortgage?

The major advantage of a discounted variable rate mortgage is that the borrower receives a lower interest rate during the discounted period. However, early redemption penalties and reversion to standard variable rates at the end of the discount period are two obvious disadvantages.

How do I find a discounted variable rate mortgage?

For more information about discounted variable rate mortgage loans and to get a discounted variable rate mortgage loan quote, please use our Mortgage Enquiry Form and one of our experts will contact you for further assistance. Alternatively, you can give us a call on .

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