Variable Rate Mortgages

Interest rates on a variable rate mortgage will rise and fall with the Bank of England’s base rate. Under a Standard Variable Rate Mortgage, monthly payments would only change once a year with an annual review procedure. Mortgage lenders add have their own interest rate on top of this base rate, it is normally set at about 1% to 2% higher than the base rate. So when the base rate is 6% you could be paying 7% or more for the year.

If you would like a mortgage with changing interest rate then you could also consider a Tracker Mortgage, these come with the same 1% or 2% interest set above the base rate but any change of base rate by the Bank of England will affect your mortgage straight away and not just once a year. This can be beneficial to your mortgage if the rates go down but then not so good when interest rates rise again as then your payments will rise.

At PeopleFinance.co.uk we can help you find a Variable Rate Mortgage because an independent financial processor will aim to get you the best deal to match your credit circumstances.

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Related glossary terms to UK Mortgages:
Adverse Credit | Credit Checks | Building Reports | CCJ's | Defaults | Arrears | Bad Credit | Buy to Let | APR | Estate Agents | Early Redemption Penalties | Exchange Contracts | Gazumping | Loan To Value | Mortgage Term | Negative Equity | Stamp Duty | Bank of England Base Rate

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