Discounted Rate Mortgages

The lender offers a true initial discount, for example a reduction of 0.5% on their normal variable rate for a given period, commonly two years.

Whilst you benefit if rates go down, you also pay more if rates go up. At the end of the discount period, the rate reverts to the lender's variable rate applicable at that time.

You may have to pay an arrangement fee and there may be an early repayment charge during the discount period