If you are looking to get a mortgage for your first home then we at Central Mortgages aim to help you, the borrower, get the best and the most appropriate loan for you. Some people who are new to the housing market may be unaware that there are many different types of mortgages available. Here, we’ll look at the Variable Rate versionb&
Variable Rate Mortgages
A variable rate mortgage really is what it says on the tin; so your mortgage repayments can vary, depending on whether interest rates go up or down. It is also the case however, that a lender might decide to increase the interest on your loan irrespective of which way general interest rates are going. If the interest rate on a typical B#100,000 mortgage goes up just one percent, this could mean an increase in your monthly payments of around B#80. On the other hand, when interest rates are low, your lender could reduce your monthly payments, but is not obliged to do so.
One of the things that attract first time buyers to a variable rate mortgage is that the arrangement fees are often lower than for a fixed rate or tracker mortgage. If you know that at some point you will have more money, and may want to pay off your mortgage early, you wonbt be penalised for this. Variable rate mortgages can however be more expensive than you originally anticipated. For many first time buyers, a discounted rate or a tracker mortgage may be more appropriate.
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