How long Should the Discount Period be? This is a crucial consideration to take into account. The question you need to ask yourself is this: Why I am choosing a discounted rate mortgage? The shorter the period of the discount, the better the discount is likely to be.
So, if you are a serial re-mortgager, going all out for the lowest mortgage rate even if the discount period only lasts for, say, two years may be the most appropriate decision. However, if you are looking to secure a discounted mortgage rate for at least, say, five years then you are unlikely to be able to get the very lowest discounted rate on the market, as it is unlikely to be offered over the full five years.
Compare discounted rate mortgage deals with our best buysWhat will the Redemption Penalties be? Mortgage lenders offering discounted rate mortgages are becoming increasingly wise to the growing trend among consumers of financial services to shop around regularly. This has led to the mortgage deals with the best discounts often also having the biggest penalties attached.
Obviously, from a mortgage lender’s point of view, there is no point offering you a fantastic deal to take out a mortgage loan with them, only to have you jump ship as soon as a better mortgage deal comes along. This makes it very important for you to check whether there are early and extended redemption penalties with any mortgage deal you are considering.
NB: EveryInvestor does not include discounted mortgages with
extended redemption penalties (in other words, penalties that apply after the discounted period) in its Best Buys. This means that you are free to re-mortgage after the end of your discounted rate period without facing a penalty. Of course, if you decide to re-mortgage during the discounted rate period then you normally have to pay an early redemption penalty. As this could be as much as 5% of the mortgage balance, it is worth checking the fine print. Click here for our
Discounted Rate Mortgage Best Buys.
