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Types of Mortgage Interest RateBy John Mussi resources:
Capped rate This is another special limited term arrangement where, although your payments can go up and down, they are guaranteed not to rise above a certain level. So you will benefit from interest rate falls during the capped rate period. When the arrangement finishes, you will then pay the lender's standard variable rate. Discounted rate Once again the interest rate will vary, but you will pay a rate less than the lender's standard variable rate. As you might expect, such beneficial treatment can't last forever and after a limited period of time, you will pay the lender's standard variable rate. Fixed rate A mortgage where your repayments are guaranteed to stay the same for a limited period of time, usually no less than one year and no more than five years. At the end of the period, you will pay the lender's standard variable rate. Standard variable rate A mortgage where the interest you pay goes up and down, usually in line with the Bank of England's base rate. Standard variable rate with cash back Same as above with one difference: the lender will give you a sum of money (normally a percentage of the amount borrowed) as an incentive – the ‘cash back'– for taking out the mortgage. This can be especially attractive if you need money to make any improvements to your property. Tracker Rate About The Author John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available loans via the http://www.directonlineloans.co.uk website.
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