Most lenders offer new customers a discount on the standard variable rate they offer. The discounted rate will be valid for a set period and will fluctuate in the same manner as standard variable rates. After the agreed set period, the interest rate will revert back to the lender’s standard variable rate.

Before you sign up for one of these deals, it’s worth checking the mortgage lender’s variable rate charges because you may eventually end up paying more than you expected.

Bear in mind that while you will be paying less, if standard interest rates rise, you’ll be locked in the agreement for a set period of time. You can, however, simply change to another discount rate deal as soon as the period is up – but do check that there are no exit penalties first.

Filed under: Category mortgage info | Tags: discounted rate,exit penalties by admin