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Types of mortgages >
Standard Variable |
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Standard Variable
This is the rate that all lenders charge, it is generally the
benchmark they use to work out their other rates from and does
differ from lender to lender.
At the time of writing this, the average standard variable rate
is approximately
6.5%pa.
The variable part of the name means that the interest that is
charged on the mortgage will fluctuate roughly with the
fall and rise of interest rates set by the Bank of England.
The majority of borrowers who have been with their lender for a
significant period of time will be on this rate or when the deal
that they have arranged with their lender at the outset of the
debt has expired. It should be noted however if you are one of
these customers, you can either rearrange a better rate with
your existing lender or do what is called a re-mortgage with
another lender. The costs, if any, for doing this, can in most
cases be far out weighed by the benefits or savings in the
reduction or security of a new rate.
Lenders are constantly vying for your business, with this in
mind they have a budget that they can use in order to attract
new business, this comes out in the form of the rates you will
read about and no doubt be offered from ourselves and other
mortgage brokers. So even though they appear to be giving you
something for nothing, you can’t help feeling there must be a
catch. Don’t, what they are actually doing is buying your
business in the hope that you will stay with them after your
beneficial rate has ended which is when you are your most
profitable to them.
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