Standard Variable Rate
Standard Variable Rates(SVR) are set by lenders and generally rise and fall to reflect changes in the Bank of England's base rate. However, lenders are under no obligation to match the change and increases in interest rates are often passed on more quickly to customers than decreases. Discounted, fixed and capped mortgages typically revert to the SVR at the end of the offer period.
LIBOR Rate
LIBOR stands for London Inter Bank Offered Rate and refers to the rate at which banks lend to each other in the City. LIBOR rates are comparable to the Standard Variable Rate, with one notable exception: they are calculated every three months. During this period the rate is fixed which means borrowers will benefit if the Bank of England base rate rises. Conversely if rates fall you may loose out.
Base Tracker Rate
Whereas SVR mortgages tend to follow the Bank of England's base rate; Base Trackers are tied to it. Lenders set Tracker Rates a certain percentage above the Bank of England's rate and guarantee to mirror any increases or decreases. If rates are falling; borrowers profit. However, they can be costly if interest rates rise.
Fixed Rate
With a Fixed Rate mortgage the interest is 'fixed' for a given period of time. Fixed rates appeal to the cautious investor, but they lack flexibility and you are likely to face charges if you want to repay the mortgage early.
Flexible Mortgages
Flexible Mortgages allow borrowers to vary monthly repayments. By making over payments you can reduce the term of your mortgage and hence the overall cost of borrowing. You can also suspend payments if times are hard. However, flexibility comes at a cost and you are likely to face higher interest rates.
Capped Rates
A Capped Mortgage is effectively a SVR with an upper ceiling above which rates can not rise. Capped mortgages allow borrowers to take advantage of any falls in interest rates, while guaranteeing that they won't rise above a certain level for given time.
Discounted Rate
With a Discounted Mortgage the interest is set below the LIBOR or Standard Variable Rates for a specified period of time. This means that payments can rise or fall in-line with changes in the Bank of England's base rate. Once the discounted period is over; interest typically reverts to SVR or LIBOR rates, often with early repayment charges attached.
Overseas Mortgages
Ex-patriots and foreign nationals often have a difficulty arranging buy-to-let mortgages in the United Kingdom. This is largely because the application process relies heavily on credit reports from UK-based companies and the borrower having a source of income in the UK. However, the consultants at The Money Centre know exactly how each lender works and those who are sympathetic to overseas investors.
Minimal Status or Self Certified Mortgages
Simply because you aren't in a position to prove your income; doesn't mean that you represent a risk to lenders. You may be self-employed or perhaps your spouse is the breadwinner and it makes sense to arrange a mortgage in your name for tax purposes. Whatever the reason our lenders will take a practical, yet understanding, approach to your circumstances.
