Discounted Mortgage
A Discounted Mortgage offers an initial discount on the lenders SVR. This may be for example a 1% discount on an standard variable rate of 7% for the first 2 years.
Pro's
- Offers a true saving and no hidden charges. i.e the interest saved is not added on to loan.
- You may benefit from interest rate reductions.
Con's
- There may be early repayment charges.
- Your rate will increase back to the lenders standard variable rate at the end of the discount period.