Tracker mortgages

 

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Tracker mortgages

They are usually linked to the Bank of England base rate, in that you pay a set margin above the current base rate level. Unlike many of the other types of rate, most tracker rates will not revert to the SVR at any point during the life of the loan. They will continue to track the base rate until you have either paid off your mortgage or switch provider or product. You can also get tracker mortgages that have discounts and stepped discounts built into them.



Tracker mortgages

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Cashback mortgages

Cashback mortgages

Cashback mortgages provide you with a single lump sum of cash immediately on completion of the mortgage transaction. The amount of the lump sum is usually calculated as a percentage of the overall loan amount, though it can be a set figure. The percentage of the loan that is given as cashback can be as high as 5%, though amounts in the region of 1 to 3% are more common. Various different types of rate can come with cashback - capped, discounted, fixed and variable. There are also a lot of mortgages that award you three or four hundred pounds to go towards your solicitor's fees. Although this is a form of cashback, it would generally be classed as an incentive and not specifically as a cashback mortgage.


Cooperative mortgages

Cooperative mortgages

Any loans related to a cooperative residential project.


Variable rate mortgages

Variable rate mortgages

As you would expect from the name, variable mortgage rates go up and down and generally don't stay at the same level for too long. This is because the interest rate and subsequent level of repayment varies with the lender's interest rate. This is usually derived from Bank of England base rate or some other index. One such index is the banks' base rate - an average of the rates of several leading lenders.


Adjustable Rate Mortgages (arms)

Adjustable Rate Mortgages (arms)

Mortgage loans under which the interest rate is periodically adjusted to more closely coincide with current rates. The amounts and times of adjustment are agreed to at the inception of the loan. Also called: Adjustable Rate Loans, Adjustable Mortgage Loans (AML'S), Flexible Rate Loans, Variable Rate Loans.


Reverse annuity mortgages (RAM)

Reverse annuity mortgages (RAM)

Bank loan for an amount equal to a percentage of the appraisal value of the home. The loan is then paid to the homeowner in the form of an annuity.


Further Suggestions

Interest only mortgages


 
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